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Nia and Aughie continue the Department series with part 2, the Department of Treasury. They explore the Secretaries of the Treasury and their various roles and responsibilities throughout the years.
This podcast uses government documents to illuminate the workings of the American government, and offer context around the effects of government agencies in your everyday life.
Announcer: Welcome to Civil Discourse. This podcast will use government documents to illuminate the workings of the American Government and offer contexts around the effects of government agencies in your everyday life. Now your hosts, Nia Rodgers, Public Affairs Librarian and Dr. John Aughenbaugh, Political Science Professor.
N. Rodgers: Hey, Aughie.
J. Aughenbaugh: Good morning, Nia. How are you?
N. Rodgers: I'm excellent. How are you?
J. Aughenbaugh: I'm good. In fact, I'm good because our listeners, we are continuing, like I can speak this morning our series about federal government departments.
N. Rodgers: Yes, and Aughie is going to sing this one to us, in the form of the Broadway show. That may or may not involve rack. How's that for a teaser?
J. Aughenbaugh: For a teaser. Well, in particular, one of the reasons why I've contemplated doing a musical about the treasury department; the focus of today's episode, is because the first secretary of the treasury, Nia, was whom?
N. Rodgers: Alexander Hamilton.
J. Aughenbaugh: In the finest, if you will, Broadway tradition. Miranda can go ahead and do a musical about Hamilton. Let's broaden the scope. Let's do a musical about the treasury department.
N. Rodgers: First of all, I get the draw of that show, because Hamilton's life was interesting.
J. Aughenbaugh: Yes.
N. Rodgers: All of this. It was made for TV drama type, he would be a telenovela, if he were currently alive. He's got such an interesting life. I mean that in the best possible way by the way, because telenovelas are fabulous. If you're ever in a hotel and you can get telenovela, just watch. It doesn't matter if you don't know who the characters are in 20 minutes, you will know what's going on, they will explain everything to you. All of the actors are beautiful, all the actresses are beautiful, the whole thing is in their lush. They're just fabulous.
J. Aughenbaugh: If you had to stay home sick.
N. Rodgers: Telenovela is your way to go.
J. Aughenbaugh: Flip through your cable and see if they have some channels. It's just great stuff.
N. Rodgers: They're awesome.
J. Aughenbaugh: Yes.
N. Rodgers: They put our soap operas to shame. Our soap operas look like poor cousins of telenovelas. Telenovelas are always fabulous. Anyway, I'm intrigued by the idea of the treasury department because I think it was pretty controversial, wasn't it? This idea that we even needed a centralized financial situation and you get people now who are, down with the Fed, away with treasury, feared money. I don't like any of it. Then I think wow, in 250 years we're still having the same argument.
J. Aughenbaugh: It is truly remarkable as I was doing research Nia, for this episode. How long standing criticisms, arbitrary department, actually have had.
N. Rodgers: Moderately, nobody really thinks we don't need a state department, which was our last department, if you missed that episode, we did one on the state department. Nobody says, down with the state department, we don't need those stupid diplomats. Just go out in the world and do things. Well, maybe a few people say that, but it's not particularly controversial.
J. Aughenbaugh: Personal.
N. Rodgers: But man, you bring up treasury and boy, everybody has an opinion.
J. Aughenbaugh: We'll get to some of the more current, if you will critiques but you are correct. This idea of a treasury department really did flow from one of the central issues of the Revolutionary War in the United States, which was the colonies, did not have a consistent source of revenue to fund their war effort.
N. Rodgers: Because we sold most of our stuff to England.
J. Aughenbaugh: Yes.
N. Rodgers: The way that works is, when they sanction you, when they stop buying your stuff, you run out of money.
J. Aughenbaugh: Or they tax it in such a high level that British citizens no longer want to purchase colonial goods.
N. Rodgers: Again, you run out of money.
J. Aughenbaugh: You run out of money.
N. Rodgers: All of these scenarios come back to, and you run out of money.
J. Aughenbaugh: Out of money. It's not like the British government, was going to go ahead and give the colonies money to fight a war against the British government.
N. Rodgers: Exactly. They weren't quite that fair-minded, let's say. We'll give your side some money, then we'll fight it out. We'll see who wins. That's not how that's going to work ever.
J. Aughenbaugh: Even after the Revolutionary War, you get to the Articles of Confederation, the first form of government after colonial government but in the Articles of Confederation, it was a loose alliance of sovereign states. The way it was set up was the states could make contributions to the central government, but there was no enforcement mechanism if a particular states said, we're not making our annual contribution this year.
N. Rodgers: Or we're going to make partial contribution.
J. Aughenbaugh: Contributions. There was no enforcement mechanism, and by the way, guess who's still wanted money from debts incurred before and during the Revolutionary War?
N. Rodgers: That'd be the British.
J. Aughenbaugh: The British.
N. Rodgers: Also, part of what I think people need to remember about wars is that one, you have to pay people to fight them. We owed money to soldiers.
J. Aughenbaugh: Yes.
N. Rodgers: But also you pay other countries for things like arms, or food or whatever thing. Think about the fact that in the revolution, if you have all the men going off to fight, then you have farming that may or may not be lost. In some instances was lost and so that food has to be made up by other nations, as you can see right now in the conflict with Ukraine and Russia. Both sides are importing food that they might have grown themselves, except they're busy fighting in war, because that's how wars work.
J. Aughenbaugh: If you don't have the industrial capacity already in place, you're going to have to go to other nations and get arms, clothing, uniforms, other materials, and that all costs money.
N. Rodgers: In some countries, what you at least own, you pay for a little bit and you can eventually own it. The United States did that with Britain during World War II I think.
J. Aughenbaugh: Yes, we did.
N. Rodgers: But you're going to owe somebody at the end of the war. Whether you win or lose, your side is going to owe someone.
J. Aughenbaugh: Owe somebody and we owed a whole bunch of money.
N. Rodgers: I was going to say, it was not an insubstantial amount, because revolutions are not cheap.
J. Aughenbaugh: They are not. We scrap the Articles Confederation, we ratify a new constitution.
N. Rodgers: Constitution.
J. Aughenbaugh: The second department that the United States Congress created after the state department was department of treasury.
N. Rodgers: At what date?
J. Aughenbaugh: That would be. Got it somewhere in my notes. Excuse me. Yes, September 2nd, 1789. Yes.
N. Rodgers: That's the same time we get the State Department, explodes two months later, but that's when we get the name of the State Department. It started out as like the department of some dude's and then it became the State Department in September.
J. Aughenbaugh: The Department of Foreign Affairs.
N. Rodgers: Right.
J. Aughenbaugh: Yeah.
N. Rodgers: I was with some dude right before. I like my name better, but yeah. But foreign affairs, when they weren't doing solely Foreign Affairs. I'm just putting out there asks a certain question. The Department of what?
J. Aughenbaugh: Some sorry minds want to know, yes.
N. Rodgers: When they got their name changed, we get Treasury as well in the same month.
J. Aughenbaugh: Within 11 days, President Washington's nominee to be the first Secretary of the Treasury was confirmed by the United States Senate.
N. Rodgers: September 13th, 14th.
J. Aughenbaugh: Yeah. Alexander Hamilton.
N. Rodgers: That's a super short amount of time.
J. Aughenbaugh: Well, you and I've talked about this. For most of the country's history, presidential nominations to run departments were not as controversial as they were today. For most of our country's history, presidents picking people to run departments, like presidents picking justices for the Supreme Court was considered a perk of being president. Unless they went ahead and nominated somebody who was clearly unqualified. Usually, the United States Senate was, thank you, Mr. President. That looks good, Mr. President, carry on. Mr. President.
N. Rodgers: Where's my rubber stamp?
J. Aughenbaugh: Yeah, right, particularly Hamilton. Hamilton had earned his chops, during the Revolutionary War.
N. Rodgers: He wanted the job.
J. Aughenbaugh: He wanted the job in the worst way.
N. Rodgers: I'm going to put to you that probably a lot of people did not want that job, for the very reason we have talked about it being a controversial. Because all of a sudden now you're saying to the states, I might have to enforce the agreements you've come to with how much you're going to give the central bank and I'm sure the states were chafing under that. What do you mean you're going to enforce it? Enforce it how? Well, I've got a comptroller and an auditor and treasurer, and a registrar and an assistant. The six of us are going to show up and beat it out of you if you don't give it to us.
J. Aughenbaugh: You also had the fact that the US government's primary source of revenue, with the exception of the Civil War, well into the late 1800s, was imposing, if you will, taxes on imports.
N. Rodgers: They call those customs.
J. Aughenbaugh: Yes.
N. Rodgers: They were custom houses. Because taxation sound so rude.
J. Aughenbaugh: If the federal government did not protect US exports by taxing imports at a really high level. There were a whole bunch of people on a whole bunch of states that one would not be happy with the Treasury Department.
N. Rodgers: The nascent country nation would have been probably ground down by that.
J. Aughenbaugh: Yes.
N. Rodgers: Because Britain would have said, we can't win militarily. Well then we'll just win financially. We'll show up with incredibly cheap goods and we will just run you out of business and then that way.
J. Aughenbaugh: Then Hamilton, he did not court any friends, particularly among Southern states, because within days of being confirmed by the Senate, he goes ahead and details the Federal Government's finances. Basically making clear that the US Federal Government was like seriously in debt. He recommended that the federal government assume all of the nation's war debt, which the states were like woohoo.
N. Rodgers: Right, because the states had taken it out individually.
J. Aughenbaugh: That's right.
N. Rodgers: Because until the constitution, well, until the Articles of Confederation of the Constitution, we didn't have a United States. We had a bunch of states.
J. Aughenbaugh: Yeah, under the Articles of Confederation, every state was a sovereign nation state. Just a loose alliance. The states on one hand liked it but Hamilton's, if you will, tool for assuming and paying off all this debt, was the creation of the first bank. Well, this immediately upset the states because each state had already created their own banking system. Their banking systems now would be in competition with the federal government's banking system.
N. Rodgers: Their banking systems would eventually die because the federal system would be larger and have more material behind it. Which is why your money doesn't say one dollar of the state of South Carolina.
J. Aughenbaugh: No, it says.
N. Rodgers: One dollar of the United States of America.
J. Aughenbaugh: The Secretary of the Treasury's name is on all legal tender in the United States.
N. Rodgers: Because we've discussed this before briefly, so we won't go into it but money at that time, you could take your state dollars from South Carolina, taken in New Jersey. They would say, we don't accept South Carolina money here or we'll give you pennies on that dollar because we don't know how much it's worth or it's worth less here than it is there. It was a lot of drama in going across state lines and I know that it wasn't a common thing to go across state lines for most regular humans, but traders did go across state lines.
J. Aughenbaugh: A modern day analogy, Nia is think about when you go abroad to foreign nations. One of the things you have to figure out is, currency exchange. Now, most developed nations have currency exchange agreements in place but without them?
N. Rodgers: It's a nightmare.
J. Aughenbaugh: It's a nightmare and that's what occurred before the United States Constitution was ratified. Because as you pointed out, you could live in northern North Carolina and do a lot of trade with farmers in Southside Virginia. But if Virginia chose not to go ahead and accept the currency from North Carolina, well, how are you going to pay for your transaction?
N. Rodgers: What happens in some countries, Norway, I'm looking at you, is that when you go to Norway and you spend American dollars, they pay you back in krone. Because they're fine taking your dollars, but they're going to pay you back in krone. Most businesses where you buy things, the exchanges is already in their bill. So they know how much to give you back but it's funny to me that they don't keep dollars in order to return dollars to you or whatever you get krone, and then you spend krone for the rest of the time you're there until you come home. But can I just side note that Mr. Hamilton was in charge of many, many things because what did not fall under the State Department apparently fell under treasury.
J. Aughenbaugh: My goodness, yes.
N. Rodgers: He was in charge of milking off a national goat.
J. Aughenbaugh: The Department of the Treasury was like the junk closet of the federal government.
N. Rodgers: I'm kidding about that first one, but he was in charge of the post office?
J. Aughenbaugh: Yes. The General Land Office. By the way, for listeners, you may not know this. For most of our country's history, United States federal government owns huge tracks, of property.
N. Rodgers: Still does.
J. Aughenbaugh: It, still does. The United States federal government, according to some studies, is the largest landowner renter in the country but you know, Nia to your point, I'm just going to give you a brief list of the park units that used to be part of the Treasury Department. The Postal Service was part of the Treasury Department in 1829. Even though we had a Postmaster General early on in our country's history, the Post Office was part of the Treasury Department. General Land Office, which eventually became the Interior Department. Commerce in labor, where Treasury Department units until they became standalone departments in 1903. The Coast Guard.
N. Rodgers: There is no reason for the Coast Guard, seriously. We had a Department of War at some point. I can't remember when.
J. Aughenbaugh: War was early on in our country's history but the Coast Guard was seen as a department, was a unit of the Treasury Department to make sure that all goods coming into the United States were registered and paid, whatever import tax, the United States Congress had decided in a given year. Secret Service. The unit that protects the president. As was part of the Treasury Department in 1865. By the way, created, after who was assassinated?
N. Rodgers: Lincoln.
J. Aughenbaugh: Lincoln and remains there today. Secret Service is not part of this justice department.
N. Rodgers: Or the military.
J. Aughenbaugh: Or the military.
N. Rodgers: Not either one.
J. Aughenbaugh: The Bureau of Narcotics was added to the Treasury Department in the late 1800s until Congress made it an agency in the Justice Department. The Drug Enforcement Agency. The Bureau of the Budget, used to be part of Treasury until 1939 when it was moved to the executive office of the president. What we previously discussed in a different podcast episode, the West Wing. I mean, it has been the proverbial not closet of the federal government cabinet for most of our country's history.
N. Rodgers: It's funny to me because in 1789, we get state, and we get Treasury, and we get war. It's funny to me that the Coast Guard is like, but they're not really war.
J. Aughenbaugh: No.
N. Rodgers: No, they are, but they're not at this point. They end up in the treasury but those are the only three we have until it's in the 1849 and we got interior. Like we know a good 50,60,70 years or whatever it is with just the three departments, which I think is also something that we forget. You do have, you have state which has a clear thing, and you have war which has a clear thing, then you have the Treasury and they're like everything else. Everything else will fall under the Treasury.
J. Aughenbaugh: Remember, we don't get.
N. Rodgers: No wonder Alexander Hamilton wanted to be in charge of it in some sense it's everything. It touches all parts of American life, there's no one who can escape the Department of Treasury.
J. Aughenbaugh: You mentioned interior and we're going to have a separate episode about the Department of Interior. Department interior arises because we have a succession of precedents in the 1830s, '40s, and '50s who pushed this idea of manifest destiny.
N. Rodgers: But we're going to get to that.
J. Aughenbaugh: But I mean, to me, it really does demonstrate the power and scope of the Treasury Department.
N. Rodgers: Yeah. He's in charge of everything. Alexander Hamilton is essentially a shadow president at this point. In some ways, he is going to form the nation.
J. Aughenbaugh: In his proposal to create the First Bank of the United States causes one of the most significant conflicts in President Washington's two terms as president. Because the Secretary of State, Thomas Jefferson, vehemently opposed the creation of a federal bank in Washington, allow Jefferson and Hamilton to write up position papers to see which one would persuade Washington.
N. Rodgers: It had to have killed TJ the Alexander Hamilton.
J. Aughenbaugh: Didn't want it. Yeah.
N. Rodgers: One that argument considering that they were from very different strata of public life.
J. Aughenbaugh: Oh, yeah.
N. Rodgers: Unless to kill TJ as part of that but anyway.
J. Aughenbaugh: If you move forward, today the Treasury Department is basically organized in a bifurcated way. You have departmental offices and then you have operating bureaus. The departmental offices are responsible for formulating policy and management of the department as a whole, while the operating Bureau's actually carry out specific operations. A good way to think about it is the Treasury Department today is separated into policy versus operations.
N. Rodgers: Okay.
J. Aughenbaugh: Now, in terms of basic functions, even today, the Treasury Department has significant responsibility in regards to the nation's economy. It's what's referred to as fiscal policy, taxing, and spending.
N. Rodgers: You don't get capitalism and not have a Treasury Department.
J. Aughenbaugh: Yes.
N. Rodgers: Like if you decide you're going to base your society on the making, spending and whatever-ing of money,
J. Aughenbaugh: Yes.
N. Rodgers: Then the Treasury Department is going to be a huge, powerful entity.
J. Aughenbaugh: If you think about capitalism in its purest essence, it is the investment in spending of capital. How do you make sure that individuals who have capital can invest it, and spend it, and get return on their investment with our Treasury Department?
N. Rodgers: That they can be regulated from harming, those who do not have capital.
J. Aughenbaugh: Yes.
N. Rodgers: Because that's part of what Treasury does is regularly, well, theoretically. We can talk bitterly about big banks and too big to fail and people not being punished properly and that thing. I hold Treasury responsible for some of that, although some of that is also Congress. I'm looking at you. You're not getting out of the room without somebody behaving glances.
J. Aughenbaugh: Some of it is the Securities and Exchange Commission which regulates Wall Street. Some of it is the Federal Reserve. By the way, listeners, this is a very important thing to remember because as we are recording these episodes, the Federal Reserve has been in the news quite a bit. The Federal Reserve Board is separate from the Treasury Department.
N. Rodgers: We're going to talk about Federal Reserve at some point.
J. Aughenbaugh: At some point, but the Department of Treasury has no functional control over the Federal Reserve. For some people, that's very problematic.
N. Rodgers: Right.
J. Aughenbaugh: That's very problematic but they are two separate government entities. In fact, the Federal Reserve is that falls into the category known as a government corporation.
N. Rodgers: Like the post office. It's a weird thing.
J. Aughenbaugh: It's a weird, if you will, entity but Nia just think about some of the stuff that Treasury does today. I'm pretty sure that many Americans are unaware of this. Treasury is responsible for fiscal policy, both domestic and international. If you wonder, for instance, you mentioned the war in Ukraine and the United States government, as given billions of dollars in aid to the Ukrainians. The treasury department is responsible for the transference of money from the federal treasury to the Ukrainian government.
N. Rodgers: Right.
J. Aughenbaugh: Okay. Tax and tariff laws, what unit of Treasury is responsible?
N. Rodgers: I'm assuming the IRS.
J. Aughenbaugh: You are correct, the Internal Revenue Service.
N. Rodgers: Because revenue, that's the whole point.
J. Aughenbaugh: Yes.
N. Rodgers: That's the modern form of the customs house.
J. Aughenbaugh: That's right.
N. Rodgers: When you're talking about international policy is also international tariffs and this idea of controlling how we exchange goods in the world, like goods and money.
J. Aughenbaugh: Listeners, when you hear about trade wars, the IRS is involved.
N. Rodgers: The Treasury Department is involved.
J. Aughenbaugh: Yeah. Because IRS imposes tariffs and they get broad policy guidance from the Department of the Treasury. IRS agents are not just, hey, today we're just going to go ahead and impose a tariff on Japanese automobiles. No, they don't have that discretionary authority. That's made in a trade deal by the President's office, who then tells the Department of Treasury, promulgate regulations to impose these tariffs.
N. Rodgers: Well, and if the president is smart, but we're going to go there anyway, if the the president is smart they will include the Secretary of the Treasury in those discussions in terms of, if I pull this string, what's it going to screw up on the other side of my sweater? Am I going to lose an arm off my sweater if I pull this string? Yes, sir, you are. Well, then let's not do that. We need to find commensurate tariffs because there's a sweet spot where it's the right amount and you still have flow of trade where when it gets to be too much on one side or the other, then trade does all weird things and prices go up and down and people go bananas because they don't know how much it's going to cost.
J. Aughenbaugh: Then consumers get hurt.
N. Rodgers: Right. Producers get hurt.
J. Aughenbaugh: They started writing to Members of Congress and getting Congress to start holding hearings.
N. Rodgers: I can't afford a $10,000 refrigerator or whatever.
J. Aughenbaugh: Exactly.
N. Rodgers: I think that that's an interesting thing that people don't realize that those levers are delicately moved, they are not yanked.
J. Aughenbaugh: We are talking about policy implementation. That's what you're getting at here, right?
N. Rodgers: Yeah, when the president says, we're going to sanction so and so. The Treasury has to figure out how we're going to do that.
J. Aughenbaugh: Yes. You can't have presidents just off the top of their head saying in a press conference, yes, we're going to go ahead and sanction, for instance, the Russians because they attacked the Ukraine. That should probably be vetted by not only the State Department but Treasury.
N. Rodgers: Yeah. While we love all of the presidents who have served, not necessarily for their personalities but the fact that they gave service to this country and we can admire and respect that about all of them, some of them are crazy chuckle heads who say stuff like that. I would love to say that it's one party versus another, but it's not.
J. Aughenbaugh: No.
N. Rodgers: You just get somebody who gets fired up about something and they say or they say off the cuff, yeah, we're going to sanction, pick Lichtenstein. Liechtenstein's like what did we do to you? Then it causes an international whatever. Then the State Department's on the phone with Liechtenstein going no, they misspoke. It's okay, everything's fine. Look, we're not doing anything. It was just an off-the-cuff remark. It was a joke.
J. Aughenbaugh: It's at that point that you have a conference call in a big conference room with the speakerphone in the middle of a really big conference table where you have the Secretary of State, the Secretary of the Treasury, and all their minions basically reassuring Liechtenstein.
N. Rodgers: Lichtenstein's treasurer and diplomatic cops.
J. Aughenbaugh: Yeah. Minister of finance who are just like what did we do?
N. Rodgers: Right. The President was making a joke. We didn't mean it, we're not going to do anything.
J. Aughenbaugh: Yes.
N. Rodgers: Oh, my goodness. Then Liechtenstein's like, well, you need to tell people that that was a joke.
J. Aughenbaugh: Yes.
N. Rodgers: You need to tell people we haven't done something. Then you get a slight small international incident.
J. Aughenbaugh: Yes.
N. Rodgers: But God loving presidents will just do that sometimes. I think it's because they run on no sleep. I think presidents don't sleep. I think we think they sleep, but I think they just hang from the rafters for a couple of hours.
J. Aughenbaugh: Like bats.
N. Rodgers: Like bats. Then they come back and they start saying stuff that you say really, sir?
J. Aughenbaugh: It's funny because we've talked about the office of president in a number of podcast episodes.
N. Rodgers: Yeah. When I'm president, I'm going to sleep.
J. Aughenbaugh: We've had our colleague Bill Newman on and we've talked about certain presidents who have been, shall we say, criticized for not being hard working, right?
N. Rodgers: Yes.
J. Aughenbaugh: But on the other hand, those were the presidents who got sleep, who took vacations. I listen to friends and people I come in contact with who are like so and so. Presidents spend a lot of time at Martha's Vineyard or on the golf course. I'm like I want them taking more time. I want them to be well-rested, relaxed because when they're on the job, they're facing decisions that many of us would be like, I have no idea how to respond to that and I want to go to a padded room now and be hugged by my mommy.
N. Rodgers: Right. I think that if you hire the right people, what the president should be is a crisis manager.
J. Aughenbaugh: Yes.
N. Rodgers: The rest of the time, I need you to be totally chilling because when it goes down, I need you to be on 1,000 percent.
J. Aughenbaugh: Yes.
N. Rodgers: When we are being invaded by aliens, when they land, I want [inaudible] to be talking to somebody who is completely in charge of their faculties.
J. Aughenbaugh: Yes.
N. Rodgers: Instead of somebody who has certain gradient.
J. Aughenbaugh: When the Canadian government decides to go ahead and take Detroit, right?
N. Rodgers: We want somebody very calm to talk to Trudeau and not somebody who hasn't had any sleep.
J. Aughenbaugh: Yes. I don't need a president to act like me at the end of a long school day where I've had a pot-and-a-half of coffee. No.
N. Rodgers: Then you just say things.
J. Aughenbaugh: Yeah but back to the Treasury Department.
N. Rodgers: Can we talk about the Mint?
J. Aughenbaugh: That's where I was going to go to next. We've already talked about the IRS. Let's face it, there's no American who loves the IRS, but nevertheless. But then we have the Mint.
N. Rodgers: Everybody loves the Mint.
J. Aughenbaugh: What does the Mint do?
N. Rodgers: It makes coins and currency.
J. Aughenbaugh: Yes.
N. Rodgers: Also, if you're in the middle of the night, you can buy all things from the Mint on QVC.
J. Aughenbaugh: Oh late night TV.
N. Rodgers: If you haven't slept in weeks, you can be like, oh, coins with flowers on them. They're making a flower printing of silver quarters or whatever and you buy.
J. Aughenbaugh: Well, how many times have you seen advertisements for some aborted Mint run of a coin where they didn't have the proper ratio of gold to silver to whatever and you're like, wow, the mint screws up that much. I can go ahead and get some of these unusual defective coins? But of course I want to go ahead and get those. Wouldn't those be excellent stocking stuffers for Christmas?
N. Rodgers: Exactly, because it's four o'clock in the morning and it seems like a good idea. Just as a side note for our listeners, we are not financial advisors.
J. Aughenbaugh: Yes.
N. Rodgers: But we are encouraging you not to buy midnight things. Anything between midnight and 7:00 AM, we want you to reconsider in the daylight hours.
J. Aughenbaugh: Let's just put it this way because of this little snippet of this podcast episode; basically, any decision that you are making on very little rest at two o'clock in the morning probably isn't a good decision.
N. Rodgers: Right. I'm going to quit my job and move to Hong Kong. Why don't you wait and decide if you want to do that 24 hours from now after you've had some sleep. Not that there's anything wrong with Hong Kong.
J. Aughenbaugh: There should be something on Amazon, right?
N. Rodgers: Are you absolutely sure or it should wait 24 hours to put your order through?
J. Aughenbaugh: Yes.
N. Rodgers: Between midnight and 7:00 AM, if you order anything if feel like you wait. I should have a waiting period.
J. Aughenbaugh: The number of times where I've had stuff delivered to my house because I went ahead and placed an order at 1:30 in the morning. I thought it was a really good idea and I really needed it.
N. Rodgers: For some folks, it should also be a sobriety test. Things show up and you're like, okay, who ordered llama? But anyway. The reason I want to also mention the Mint before we move on to the cool guys who've served as treasury secretaries, but the thing I want to mention about the Mint and the common phrase that you hear about the Federal Reserve is they print money. The Federal Reserve does not print money. That is the treasury. Only the treasury can print money, which drives me bananas. It's like the same thing when people say it was very unique. It can't be very unique because unique is unique. There's a meaning to that word and very does not attach. Similarly, the Federal Reserve does not print money. Now, they might spend it like they're printing money. They themselves do not print money.
J. Aughenbaugh: Federal Reserve makes policy that affects how easy or difficult it is to access money.
N. Rodgers: Right. It's more complicated than you're making it.
J. Aughenbaugh: Yes. The Federal Reserve raises interest rates. It makes it more difficult for people to borrow money, to then eventually spend. If they lower interest rates, it makes it easier for people to borrow money and they will hopefully, then use that money to spend. But the Federal Reserve does not print money.
N. Rodgers: It makes me bonkers when they say that.
J. Aughenbaugh: The Federal Reserve controls access.
N. Rodgers: If the Mint tomorrow decided not to print money, that would be that.
J. Aughenbaugh: Yes.
N. Rodgers: The Federal Reserve would have to suck it up.
J. Aughenbaugh: By the way, as part of my research for this episode, the Mint is not printing as much money because Nia, many Americans now don't use hard currency.
N. Rodgers: I know I'm weird. I think it keeps me from buying extra stuff that I don't need.
J. Aughenbaugh: Well, there is psychology too. If you have to pull out your wallet out of a purse or out of your pocket, it actually gives your brain more time to contemplate the pros and cons of purchasing something.
N. Rodgers: Slows you down a little bit. I do want to talk about the notable Treasury Secretaries because if you think Hamilton was the only one, you're wrong.
J. Aughenbaugh: Oh, goodness no.
N. Rodgers: There have been some really interesting people who have been Treasury Secretary, but I want to remind our listeners that in 2023, the Mint will cease to print pennies. It will cease to. They don't print them but they will cease to Mint the pennies.
J. Aughenbaugh: They will no longer produce them.
N. Rodgers: When you see things that cost something 99, you won't be able to do that with cash.
J. Aughenbaugh: That's correct.
N. Rodgers: No pennies. It makes me a little sad.
J. Aughenbaugh: Or you just get used to the fact that you're no longer going to go ahead and get pennies as change.
N. Rodgers: My grandmother had a penny jar.
J. Aughenbaugh: I used to roll pennies from my penny jar and go down to the bank and turn them in to get dollar bills.
N. Rodgers: It makes me sad that there are not going to be pennies anymore. I get it. They cost more to produce than they are worth. There's a new cost, it costs 1.1 cent to make one cent. You're losing money every time you do that. That's why the Mint is getting rid of them but she had this huge penny jar when we were kids. We would just play in it and she would tell us, find me 10 from this year or find me whatever. It was an occupation for us when we were very little but I think you're right that most people probably don't have coins anyway, or don't have very much in the way of coins. But I'll miss the penny.
J. Aughenbaugh: One of the first things, Nia that I did with my great grandfather was roll pennies. Then we would walk down to the local bank and exchange them for dollar bills.
N. Rodgers: It would change tills.
J. Aughenbaugh: Yes.
N. Rodgers: At some point, they'll start making tills with a certain number of cavities. They'll have one less cavity because they won't have pennies but anyway, I just wanted to point that out. If you're a penny lover, a penny collector, anything like that, you should probably get them this year while you can because they will cease to make them next year.
J. Aughenbaugh: Before we get to the notable Treasury Secretaries, guys, there's something I want to point out within the Department of Treasury; they have various, if you will, departments. Again, the departments do the policy. We have assistant secretaries. The list of them is just truly phenomenal. You want to talk about how bureaucratic the Treasury Department is. They have a deputy secretary. They have an undersecretary for international affairs, an undersecretary for domestic finance. Then undersecretary for the Office of Terrorism and Financial Intelligence. Then they also have various deputy secretaries and inspectors general who are supposed to check the work of the undersecretaries. There is a main Treasury Building in Washington DC. If you ever go to DC, there is a main Treasury Building. The Department of Treasury employs over 125,000 people. Just think about that, Nia.
N. Rodgers: That's how a lot of people.
J. Aughenbaugh: That is a lot of people.
N. Rodgers: But you know what? In some ways, it's not nearly enough.
J. Aughenbaugh: Is grossly understaffed.
N. Rodgers: Years behind in doing a lot of its work because it's not been funded properly over the years.
J. Aughenbaugh: When was it? Earlier this year, this is 2022, the Commissioner of the IRS, the head of the IRS, testified in front of Congress that the IRS was still processing tax returns from 2021. That is unconscionable.
N. Rodgers: A year later. You're waiting for your tax return? Sorry, can't help you. We're getting to it as quickly as we can. It is literally not intentional. Well, I don't know. It might be intentional on the part of people who are not financing it or supporting it.
J. Aughenbaugh: Well, members of Congress, particularly Republicans, were like the IRS has plenty of staff. Of course, the IRS was just like you guys want us to go after more tax cheats. We need more IRS agents. By the way, the Commissioner of the IRS was also very critical of, for instance, Democrats because every time there was a pandemic aid package where Americans got checks, it went through the Treasury Department and the IRS. They had to take IRS agents off of processing tax returns. They actually establish who was supposed to get what amount of money in pandemic aid from the federal government.
N. Rodgers: The IRS is complicated for me because I don't understand why the IRS operates the way it does. The IRS should send me a bill. I should look at the bill. I should look at their reasoning on the bill and if I agree with it, I should pay. If I don't agree with it, I have x-number of days to fight it. To lodge a, "No, this isn't good. I want an investigation."
J. Aughenbaugh: It's funny you mentioned that Nia because the current system where your employer is supposed to take money out of your check was supposed to make the payment of income taxes easier.
N. Rodgers: Because you didn't have to save up for a full year and then write a check. I know I want to go back to the 1920s, but not really. A hundred and twenty-five thousand people but actually, that's not nearly enough in some instances. If you want to think about doing the tax returns of 300 million people?
J. Aughenbaugh: Yes.
N. Rodgers: Or even if you take out all the kids, 200 million people.
J. Aughenbaugh: If you take out the kids and those who don't have to pay income taxes because they don't make enough money, you're still talking about. Well, over 200 million Americans.
N. Rodgers: A hundred and twenty thousand in the face of that doesn't look like it's nearly enough. Can we mention one other thing that's embedded in this Treasury Department?
J. Aughenbaugh: What's that?
N. Rodgers: It's not just that it's embedded in the Treasury Department. There is an office of the general counsel in every single department. Every single department has a lawyer. Well, they have a staff of lawyers who are supposed to leap in front of certain things and say, "Sir, you can't do that, that's illegal."
J. Aughenbaugh: Yes.
N. Rodgers: The IRS cannot show up at your house and shake you down for money. That's illegal. General counsel is like, "Sir, you may want to do that but it's a terrible idea." You can't just go around shaking people down for money. That's not how this works or whatever.
J. Aughenbaugh: I tell my students all the time who are thinking about going to law school and becoming lawyers. I'm like, guys, you only consider going to work for the federal government because I said every department has a general counsel's office. It's not just the Justice Department. It is every department, and for that matter, typically, every other organization within the federal government has their own legal counsel's office, and their job is to do what you just described.
N. Rodgers: Jumping in front of things that you're going to cause problems.
J. Aughenbaugh: Well, cause problems. Also, they're the same ones who vet every potential regulation.
N. Rodgers: Right.
J. Aughenbaugh: Though before the IRS sends out their annual updates of "Guidance" about how you can fill out your tax returns, what you can go ahead and write off, and what you can't, it's already been vetted by, wait for it, lawyers.
N. Rodgers: That's why most of the time those regulations just pass into law because they've already passed into the regulatory body. Because they've been vetted by lawyers trying to find every single problem that could cause a lawsuit for the agency.
J. Aughenbaugh: You're not going to make as much money being a government attorney.
N. Rodgers: To have steady work.
J. Aughenbaugh: Yes.
N. Rodgers: You'll have steady work until the end of the empire, in this point you will have larger problems.
J. Aughenbaugh: Until the fall of the republic, you can go ahead and cash a paycheck from the federal government if you're in a jury.
N. Rodgers: I know we don't have a whole lot longer on our episode but I want to mention a couple of people just because of their names.
J. Aughenbaugh: Yes.
N. Rodgers: I know, of course, we have Hamilton, he's the fastest. He's the flashiest. Now people have got to be Uber flashy in order to get past his flashiness, which some of them managed to do but can we just briefly mention Salmon Chase?
J. Aughenbaugh: Salmon Chase, yes.
N. Rodgers: Can I just say Salmon Chase is such a yuppie white guy, Harvard graduate name, like biff. Like Salmon Chase. Either that or it's a development where you build apartments. Where do you live? I live in Salmon Chase. That's such a great name. He's one of Lincoln's rivals. One of the team of rivals.
J. Aughenbaugh: Yes.
N. Rodgers: People who didn't really like Lincoln all that much than he had.
J. Aughenbaugh: Salmon Chase ran against Lincoln for the Republican Party nomination for president in 1860. He quite obviously lost to Lincoln. Salmon Chase was a former Governor of Ohio. He was a vehement abolitionist.
N. Rodgers: Good for him.
J. Aughenbaugh: He pushed Lincoln very hard on producing the Emancipation Proclamation.
N. Rodgers: So we like Salmon Chase, not just for his money, but also for his politics.
J. Aughenbaugh: Well, what's really unusual, Nia, I don't know if you picked up on this in reading the list, but the number of former secretaries of treasury who ended up working or serving on the Supreme Court is just truly phenomenal.
N. Rodgers: Roger Taney.
J. Aughenbaugh: Roger Taney.
N. Rodgers: Taney, who's I think one of your favorites. Infamous favorites in the sense of people that you can point to and go, "Dude, seriously?"
J. Aughenbaugh: He was a key justice after John Marshall, and he actually penned the infamous Dred Scott decision. We got Salmon Chase.
N. Rodgers: Salmon Chase was on that, Scott decision.
J. Aughenbaugh: Yes. He became chief justice of the Supreme Court. Fred Vinson, who was picked by Truman to be the Secretary of Treasury also became chief justice. By the way, he was picked to be chief justice when Robert Jackson thought he was going to be promoted to be chief justice. When he didn't get it, he accused Truman of reneging on a promise that FDR made to him, and he also accused a couple of his colleagues on the Supreme Court of sabotaging his promotion to be chief justice. Right?
N. Rodgers: Right. But Truman's response to that was, another man made you a promise, not me.
J. Aughenbaugh: Yeah, I didn't make that promise.
N. Rodgers: I'm not breaking any promises, I didn't make you any promises. Andrew Mellon. Is it Mellon our black sheep treasurer in that.
J. Aughenbaugh: He gets indicted by the Roosevelt administration for tax fraud.
N. Rodgers: Gives an art collection?
J. Aughenbaugh: Yes.
N. Rodgers: He gives the art collection, and then he manages to swan out of there without too much damage. For more on that, you can see one of our summer episodes about the National Gallery.
J. Aughenbaugh: The National Gallery. Andrew Mellon was one of the leading industrialists, that's the polite way.
N. Rodgers: Of saying, robber baron.
J. Aughenbaugh: Yeah, I was going to say. Those who are critical would say, he is one of those robber barons of the late 1800s, early 1900s. If you're from Western Pennsylvania, like I am, the Mellon family is very prominent even today, in Western Pennsylvania. Andrew Mellon was the secretary of the treasury, for presidents Harding, Coolidge, and Hoover.
N. Rodgers: Ask yourself, kids, what did the presidents have in common? They were at the beginning or during the Great Depression. If this is the secretary of treasury during the Great Depression, perhaps his policies weren't the best.
J. Aughenbaugh: He was the secretary of the treasury during the roaring '20s.
N. Rodgers: Everything's great.
J. Aughenbaugh: Everything's great.
N. Rodgers: It's going to be great forever.
J. Aughenbaugh: Yes. His philosophy was debt in tax reduction. Classic, if you will. Republican government should not spend money. The government should have a balanced budget and this was known as the Mellon plan. If we reduce taxes on businesses, businesses will go ahead and invest. When they invest, they will employ more Americans, etc. That was fine until as you pointed out, Nia, the Great Depression yet. The federal government had tax policies that could not generate enough revenue to help out all those Americans who were losing their jobs, losing their homes, couldn't put food on the table, etc.
N. Rodgers: Hoovervilles?
J. Aughenbaugh: Yes. FDR comes into office, and he wants to send a very clear message to the American public that the wealthy elites of American society are going to pay for their sins.
N. Rodgers: Dang it.
J. Aughenbaugh: Who did he target? Andrew Mellon.
N. Rodgers: Historical question about whether Mellon was any worse than any other, but he was very publicly convenient, which I think FDR needed to make a public statement and he picked somebody who people had heard of. If you picked a billionaire that nobody had heard of.
J. Aughenbaugh: Andrew Mellon was not sympathetic. Let's face it.
N. Rodgers: Right. He was a flaming ****.
J. Aughenbaugh: If you saw photos of them, you were like pinched, upper crust, elite, who wasn't suffering during the great depression. In fact, he wasn't paying any taxes. As we discussed with the episode on the National Gallery, the way he had gotten around paying taxes for years was that he would loan his art collection to various art galleries it'd be able to write off. The appreciated value every year of this load art collection, which he still owed but we've had other very prominent secretaries of the Treasury.
N. Rodgers: Well, immediately after you get Henry Morgenthau, who looks like a bureaucrat. Oh, my gosh. In the dictionary, the word bureaucrat, there's just a little picture of it. He looks like a guy who's like, "Sir, I've been looking at the accounts." Like every sentence he says is going to start that way.
J. Aughenbaugh: He's nondescript, nameless, faceless, but this is the guy who was instrumental in setting up the Works Progress Administration and the public works art project, which we discussed in a previous podcast episode. He came up with the financing for World War II which was the marketing of war bonds.
N. Rodgers: He's brilliant.
J. Aughenbaugh: After, or as the war was coming to a conclusion, he chaired the infamous Bretton Woods Conference in New Hampshire, which ended up creating, in effect, the international postwar economic system that we even have today. Because it was that conference that created the International Monetary Fund and what became eventually the World Bank. Again, that's that idea that if you tie together the world's nation-states financially, you make it really difficult for them to want to go to war, because if they go to war, they would be harmed as much as any nation that they might attack. Go ahead.
N. Rodgers: I want to throw out George Shultz out here because, George Shultz, in my childhood, you just couldn't figure out what he was Secretary of because he was secretary of everything. At some point, his name is going to come up in my youth, not my childhood, but my youth, because see, well, no, he was in the Nixon administration.
J. Aughenbaugh: Nixon, Ford, Reagan, and Bush 41.
N. Rodgers: Right. It is my early childhood into my early adulthood. What George Shultz charged off now?
J. Aughenbaugh: My guest listeners, when Nia and I did an episode with Bill Newman, we talked about George Shultz and other, if you will, department heads. They were of an era to where they were, how can I describe it? They were such good managers, you could put them in the Department of Treasury for two or three years and they would do a good job but if you were president and yet, a need to clean up a different agency, you could put them there. They would do a solid job. They were good bureaucrats.
N. Rodgers: George Shultz is one of those.
J. Aughenbaugh: Yeah, he was one of those but he does hold the distinction along with Elliot Richardson as being one of two people who held four different cabinet level positions. George Shultz was labor, OMB, Treasury, and State. It's just phenomenal.
N. Rodgers: Well, and it says a lot about him that he was trusted with all those different. Generally speaking, I think both sides of the aisle thought that he was a good bureaucrat. I don't know of a lot of Democrats who are like that, darn George Shultz, that's just not a thing that people said about him. He was in moderate enough that he was equally acceptable to both sides. Unlike the first female Treasury Secretary who is Janet Yellen.
J. Aughenbaugh: The current secretary of the Treasury in the Biden administration is our first female Treasury secretary.
N. Rodgers: It's funny, because when she was Federal Reserve chair, she was not particularly controversial.
J. Aughenbaugh: No.
N. Rodgers: She was also, I think the first female Federal Reserve chair.
J. Aughenbaugh: Sure, she was.
N. Rodgers: But she was not particularly controversial, but me and you toss a reverend treasury. Well, but part of that too is the economy is, as we record this, the economy is doing funky things. Can we agree that might be a word we care. Some people are like, it's disaster on the edge of a new depression. We're all going to be eating dirt soon, there's that side of the world. Then their side of the world that's like this is a bump in the road and it's all going to be fine and everything's going to be fine. Probably the truth is somewhere in the middle but right now, she's getting beaten up and part of it is because she actually said something out loud which bureaucrats never do. I don't know why somebody didn't jump in front of her and tell her not to do this. She said, "I'm sorry, I was wrong about some stuff." That apparently set off an entire lunacy on the fringes of both parties. Part of me wants to say, people it is not bad to admit when you were wrong. That's a good thing because then you can correct.
J. Aughenbaugh: In reference, what Nia is referencing is the fact that as early as summer of 2021, there were some signs that the US economy was enduring some inflationary pressures. The Biden administration, including Secretary of the Treasury, Yellen, made the claim that this inflationary pressures would be transitory. Maybe a quarter maybe two but as we are recording, we're now almost a year into some of it.
N. Rodgers: Yeah. She's like, I was probably wrong about the transitory and we're like, you think? You might wait a little bit that she was out of touch, I think.
J. Aughenbaugh: Yeah, but Nia, to your point, and this is where we were going to end up and this is where we started. When she owned up to the fact that the Treasury Department specifically and the Biden administration generally may have misread, the depths of inflation in the United States. As you pointed out, progressives on the left and conservatives on the far right, they just went off the rails and it reflects what we have historically seen in regards to criticism of the Treasury Department.
N. Rodgers: Because one side thinks they're not aggressive enough and by the way, that used to be the Republicans. Now it's the Democrats because as we know, every so often it's like the polar shift where you get north and south shift, is same thing but one side thinks they're not aggressive enough and they need to be more aggressive and out there protecting, blah, blah, blah. Then the other sides, like they're too aggressive, they're rooting capitalism, oh my gosh, now there's no free market, blah blah. It doesn't matter by the way, which size named what, because those are always the arguments. That's been the argument since Hamilton down to Yellen is, one side is telling them they need to be more aggressive in the other side is telling them they need to be less aggressive. The Treasury Secretary has to walk that why?
J. Aughenbaugh: Because the core purpose of the Treasury Department is fiscal policy. How does the government use its taxing and spending authority to regulate and manage the nation's economy?
N. Rodgers: There is nothing that makes people more insane than money.
J. Aughenbaugh: That's right. I mean, think about, for instance, Nia you used as an example a few moments ago. The Treasury Department's role in the bailouts of the too big to fail industries during the great recession of 2007 to 2009.
N. Rodgers: Bull crap, yes.
J. Aughenbaugh: One of the more fascinating things for me when I teach the Great Recession in my public policy class, is how my students, no matter where they fall on the ideological spectrum, are highly critical of the Treasury Department's role in the bailout. The liberals frequently are like the Treasury Department should have prosecuted those CEOs that were running fast and loose and avoided government regulations, blah, blah, blah. Then you have conservatives who are like, we shouldn't have bailed them out. That's a morally hazardous condition.
N. Rodgers: Yeah, and I feel both of those things.
J. Aughenbaugh: We should have let the market recover on its own.
N. Rodgers: Exactly. If we believe in capitalism and if we believe that the free market will in fact correct, then we have to get out of its way to do that and if people get hurt, people get hurt but the problem was people who were getting hurt were retirees.
J. Aughenbaugh: Yeah. It wasn't going to be the CEOs that got really hurt. It was going to be all the retirees who saw their investment income just dry up. It was going to be all those Americans who went ahead and took out home mortgage loans, who were now all of a sudden underwater and it was going to be all of the classified staff, custodians, etc., that have worked for these two big to fail companies who all of a sudden would lose their jobs.
N. Rodgers: Which just goes to show what Aughie's point is about every single thing that we talked about in government, which is that it's complicated. I'm going to get him a t-shirt that he can wear all the time. I mean I get it a bunch of colors so that he can wear it every day. Then you can just point to his chest and be like, it's complicated because there is nothing, there is no lever in government that you don't shift a little bit that it doesn't shift something else. There's no right. Yes. We could go after all those different Jamie Diamond and all those sorry, he's the one who leads to mind because he's been talking about hurricanes lately, financial hurricanes, which is quite the image. Thank you, Jamie. Like all of those, we could have gone after those guys. You're right. When that company goes under who it hurts are a lot of what I think of as regular people, just regular folk. Yes, it might hurt Jamie Diamond, but it's also going to hurt your right. The janitorial staff and the secretaries and the people who need those jobs in order to make to continue living and it's going to hurt all of the investors and some of them, I don't care about hurting because they're gazillionaires but a lot of them are not. I care about hurting those people and it becomes complicated. That's what Aughie says to me every time. I'm like I had decided this black and white thing. He's like, really? Here, hold my beer for a second. Then he proceeds to destroy my idea of, there's simple good or bad.
J. Aughenbaugh: Is this going to be?
N. Rodgers: Another dream-crushing.
J. Aughenbaugh: Well, no, I mean.
N. Rodgers: In this sense, it's a good thing.
J. Aughenbaugh: You were talking about t-shirts, it's complicated. So it's just going to be order the podcast and merch.
N. Rodgers: Yes. The merch. Yes, it's complicated.
J. Aughenbaugh: It's complicated, arbitrary, and capricious.
N. Rodgers: Exactly. Oh my gosh, we should just have a t-shirt printed with all of them and then we could just point to which one.
J. Aughenbaugh: Yes.
N. Rodgers: What's the appropriate phrase and so on but I wanted to thank you for that because it is a reminder. The Treasury is a perfect reminder of how you are not going to get it right. Because someone is going to say you didn't go far enough or you went too far.
J. Aughenbaugh: Too far. That's what we frequently debate in regards to the role of government in the economy. Because they're going to be some people who say the government should have a more active role in regulating the economy and others who are going to say the government should have less.
N. Rodgers: Exactly. Get your hands off the economy and let it run the way it's going to run.
J. Aughenbaugh: Run but there's a lot of people who rely on the government to mitigate some of the extremities within an economy. I don't really think most of us understand why it's so important to have a functioning Treasury Department that is populated by hopefully, really intelligent people who can make the trade-offs that, let's face it, members of Congress might not necessarily always understand.
N. Rodgers: Patience, that's what we're counseling, is patience and kindness because no one has a crystal ball. If she could have seen where this was going, she'd have fixed it.
J. Aughenbaugh: Nobody could foresee how the pandemic was going to affect the nation's economy.
N. Rodgers: On that happy note, I would like to declare right now, I do not want to be Secretary of the Treasury. You have left me with a job I do not want. That's unusual because usually you leave me wanting more. Because then I have all these different powers but I'm looking at these powers and saying. The only thing I really want us to keep minting the penny.
J. Aughenbaugh: Listeners, we have a first in the podcast episode as we conclude this episode.
N. Rodgers: I don't want it to be secretary of the Treasury.
J. Aughenbaugh: We've identified at least one upper echelon federal government job that Nia does not want.
N. Rodgers: That's historic. Thank you, Aughie.
J. Aughenbaugh: Thank you Nia.
N. Rodgers: We're going to talk about interior next, I guess.
J. Aughenbaugh: No.
N. Rodgers: A war. Look at me skipping right over war. Look at that. I'm such a peace-neck. Is that even a word. I don't think that's a word.
J. Aughenbaugh: No that was from the 1960s.
N. Rodgers: Do they call them peace-necks ?
J. Aughenbaugh: Yes, piss-necks that was one of the more diplomatic labels.
N. Rodgers: As opposed to long hair hippies.
J. Aughenbaugh: Yes. By the way, listeners by no stretch of the imagination is Nia a peace-neck.
N. Rodgers: I would like to have peace but I would like to have it with the awareness of veiled threat. Iron fist in a velvet glove. See I want everybody to get along, but I'm willing to make everybody get along if I have too. I don't know what that is.
J. Aughenbaugh: You're a subscriber to the Teddy Roosevelt?
N. Rodgers: Exactly. Talk softly.
J. Aughenbaugh: Talk softly, but carry a big stick.
N. Rodgers: Carry a big stick. Don't make me hit you with my big stick. We could just walk softly together. I want you to want peace, but I will help you want peace, if you don't want it naturally on your own.
J. Aughenbaugh: I will encourage you.
N. Rodgers: Exactly. I will sign them up next to you with my big stick and say see this big stick? This big stick is going to make you change your view.
J. Aughenbaugh: This sounds a lot like LBJ's the treatment.
N. Rodgers: If I were tall enough to be able to, I'm 5'3' so there's no way I could probably off because he used to loom over people and hold them in clothes, and you want to do what I want you to do and maybe like, "Yes sir please let go of me." I can't pull that off, so I have to have a big stick.
J. Aughenbaugh: We get to explore that in our next episode listeners, well done.
N. Rodgers: Thank you, Aughie.
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