health. but in terms of women leading, we really are not doing anywhere near as well as we should be doing. and we shouldn't be doing it not because it's fair or egalitarian. i mean, that was our early argument. we should have women in high places because that's a fairness principle. well, i believe in the fairness principle, but i also believe in pragmatism. if everything worked in america, if law firms were chugging along really well and hospitals were running like clockwork and congress was really doing a bang-up job, i would say, well, you know, things are pretty good. we need women in leadership positions because nobody is leading as well as they should be. and if we're ignoring a big chunk of the population, maybe

>> up next, economics professor talking about his book, "harvesting gold" describing how eddison described overhauling the system, and modern day policy tieing the value of the dollar to farm commodities rather than gold. this event is an hour. >> he was born in 1937, died in 1981, and lived long enough not just to participate in most important u.s. events, but to be a very, of course, important participant given his development, inventions, manufacturing, and all the various things that he did. eddison was involved in not only the entertainment life of the nation through movies, but, of course, electrifies the country,

was good friends. with the rich and famous as well as the common man. he and his buddy, henry ford and harvey firestone with the poet went on nature trips which got heavy covered and they almost became caricatures, but edison was woven in the fabric of the country. he dealt with the vanderbilts and jp gold and morgan. there was not anyone especially on the financial side that he hadn't had some run-ins with or conflict. yet, when we think about edison, we think about the great inventions, the over thousand patents whether it's for movies or the light lightbulb or motion pictures. while the biographies and the very good biographies by paul

israel, neil baldwin, josephson mention his later in life interests in money and the financial system of the u.s., they tend to be very, very small, off the cuff sort of references. the story of edison and intense research put into the monetary system of the early 1920s was a story that while a few people may have known the detail in the contacts and the subjects and people spoke to either correspondents or in person, that story, i don't think people know or appreciate what he had to say. it's always interesting, of course, when we stumble across or find, and also famous people, famous for being smart,

creative, inventive, hard working genius 99% perse ration, 1% inspiration. when we find something out about them i don't know, we go, gee, i wonder if there's something in there that speaks to us today or just applies, perhaps to the 1920s or is there something in there that sheds light on our current situation. the interesting thing about the 20s is if i say "20s," you all think of the roaring 20s, the flappers, the speak easy, fitzgerald's chronicled life of the growing wealth in the country post world war i and the liberation in a lot of sense from household directer with the invention of the labor saving machines to the liberation of people, a lot of the soldiers having gone to europe come back

and staying on the farm figuratively speaking is hard for them to do. just after the war, the u.s. economy, europe, of course, was in shambles, the u.s. economy was facing the equivalent of what today we call a fiscal cliff. u.s. government, which had expanded from about 3% of the nation's economy to about 25% in the war effort was scaling back, and they were planning and put into place immediate cutbacks once the war finished, immediate cutbacks through heavy federal spending on all sorts of projects. the view of the federal government prior to world war i in terms of what their responsibilities were to the average person was, well, we do national defense, we do the post office, and we try to watch the flow of goods and services, especially goods, across the

borders because one of the major tax sources or customs revenues and duties, and so, of course, they were interested in goods that went in and out, but after that, you pretty much looked after yourself so if people thought about the federal government in terms of an economic engine, the way they would tend to think about their role in their role vis-a-vis the individual or even the state was, well, if we're on an ocean or border, the federal government may have a presence. there's the post office in the daily life, and other than that, the federal government was really small so following world war i, the attempt was to return the government, in fact, hardings platform was a return to normalcy. the plan was to return the government, the federal government back to its almost invisible role in the economy. well, with all of the soldiers

coming back and with the federal spending being cut back, unemployment, which during the war fell to 1% or 2%, and there were not really major agencies federal agencies calculating. these are numbers built out of state figures. unemployment, of course, fell to almost 0% in the war effort. well, it balloons to 12%-14%. in today's frame, we say, well, what was the federal government doing? well, they were typically doing what they did before which was nothing. if you were unemployed, you just had not moved far enough west. there were homestead acts that said you can go farm 160 acres, just go find it. you'd be fully employed for the rest of your life and your kids' life trying to carve a farm out of the countryside, and there was a lot of land available, but

there was a new mover and shaker in the harding administration, somebody they had to keep an eye on, and that was herbert hoover. he's chosen to be the secretary of commerce, and he convinced harding to strike a unemployment commission, brought together a lot of people to show that the federal government was interested in what was happening in the economy. that was the first evidence although there was large financial crisis in 1907, but that was the first presence of the federal government showing any interest in large scale unemployment as a federal problem. i usually considered it local, municipal, or state issue. there are hints about what's going on today with the early

1920s, and that recession, that large recession of the country went into post-war, something we kind of miss with all of the roaring twenties, flappers, speakeasy view we have of the decade. well, whaftion happening with the crisis, is prices doubled from 1916 to 1920, and there was a large deflation crisis. what that did to the purchasing power of the dollar was swing it all over. it was unpredictable. the purchasing power of the dollar is falling. as prices fall, the purchasing power of the dollar is rising. you probably borrowed thinking prices continue to go up, and the stuff you sell will be easy to sell and pay back the loan, and then subsequently, if it turns out the prices have fallen, and you are having trouble selling your stuff and

have to lower the price to sell it, it is hard to pay off the loan in the dollars that are harder to get. farmers rationally borrowed to expand the farms, take on bigger loans, were hit in the 1920s with deflation. they are defaulting on the loans, they are upside down or under water on the loans, and their banks which extended the loans are going broke, going bankrupt so that helps deepen the recession. at that point, henry ford and thomas edison are talking, and ford says -- and this part i'm extrapolating, but says, you're a smart guy, can you do something to help the farmer? at that point, edison says i will make an effort to study this money complex and try to invent or change the monetary

systems so that a dollar's a dollar. i'll try to cast what he said the variable out of money so that we can stabilize the purchasing power of the dollar, and when people make a deal in one dollar, it's the same deal a few years later in terms of dollars so that would be the variable purchasing power of money doesn't create all this problem. this issue was also tied in with a kind of interesting episode with ford experience, and that was after the war, the harding administration was trying to get rid of a lot of wartime assets, and so they were selling them. they were selling the wilson dam on the tennessee river in the scholls area of alabama. ford made an offer because it was almost completed, being built to produce amoan yum nigh

trite for emissions. nitrate is also good for fertilizer. ford offered to build a dam, and his plan was to develop and use the electricity from the dam to produce nitrate for fertilizer for farms. he took edison down to alabama to view the site and on the way down in ford's private rail car, he assessing what ford's plan is, and the plan is to pay the government $5 million for the dam, which is not complete, have the government complete the dam for another $8 million, and have them finance it not with the typical bond extended financing where the government borrows the money and repays it over time, but to finance it by issuing cash, currency, and that extra currency, $8 million worth, would be retired through time as

the electricity generated by the dam generated income which -- or generated the payments, which would then be used to retire the dollars that were created. this struck people as a follow-upny scheme, and -- funny scheme, and so when ford and edison got out of the rail car, invets gaited the -- investigated the site in alabama, and, of course, there were reporters there, and they asked edison about the scheme. he thought it was smart that the government should sell assets to ford, especially ones to be quickly turned into producing more ammunition because that signals to the outside world that, hey, if you mess with the u.s., they have got ways of producing massive arms real quickly so that just the use of the dam and to make the nitrate,

although it was going to fertilizer, other countries could see it could be diverted to ammunitions so they would be less likely to pick a fight with us. secondly, edison thought ford was a great businessman, which he was. why not have ford do it? thirdly, edison thought the financing scheme was brilliant. he thought interest was the invenges -- invention of safety. he had the run-ins with the financiers. when he was developing something, he didn't have enough money to develop it commercially. he had an uneasy alliance with different financiers at different times, but also thought the new york banks were squeezing the main street banks or the country banks, and he thought then that puts a squeeze on the farmer and forced the farmer off the land, and so if the large banks asked the small banks for their money, the

smaller banks would ask the farmers for their lopes. the farmer wouldn't repay because pricings had tanked, and farmers were pushed off of the land, and wanting to help the farmer, edison decideed to spend some time investigating the monetary system. he also after giving highly reported comments was roasted by henry hatwood, an economic journalist based in new york city who was widely read who said that the scheme that ford says edison should know better because it sounded like green backing, inflationary, impractical, and i think edison was chasenned by this so also wanted to do due diligence and not look like he was ignore rapt. from mid-december to late

january, ford studied what he called the money complex. there's a lot of correspondence between edison and others where he explains like burning the midnight oil. it's a tough subject, but i'm going to stick. i want to help the farmer. generally speaking, you know, it's an ul truistic approach, but you get the impression it's easier for a ford or edison to maintain sales if customers have currency of stable purchasing power. as he wrote to one, the farmer's trouble is not due to wall street, speculators, nor bankers, but due to a bad system of money. everything eastern men do would be done by the farmer himself if he could. we are all gamblers by nature. if a system of checks can be worked out, and i think it can,

the farmer will get justice. later on, it's the money broker, the money profiteer, the private banker i oppose gaining power there are a false power of gold, a relic of julius caesar. they want to stabilize the power by developing a money system where gold is not the only anchor for the value of the currency. he's not alone. during the years that the federal reserve act was debated and written, 1910, 11, 12, irving fisher made a name for

himself on the topic. he had a scheme of his own. he's the best known american economist of the first half of the 20th century, and once fisher got wednesday that edison was working on something they met a few times and discussed the issue. what's an interesting sideline there is they both were interested in vegetarian diets and very careful with what they ate, and they ended up speaking on much on diet as economics and money, but fisher gave one books to edison, edison wrote him, on the whole, i like it. you're wrong in spots. i marked it all up. they were interested in the currency problem. fisher invited edison to go to congress to present the plan. edison demured. don't know why. it may be that by that time, which was late 1922, he was

finished with the issue. what does this mean? does it say anything to us today? is it impractical? how did he go about ding his research? let me take the last point first. edison was very, by that time, trained in a research method which had brought him success. that was to study an issue as much as he could himself, but also turn over the heavy work to research teams. on this issue, there was not an in-house research team. the battery shop, what were they going to tell him? go to the meech shop, -- machine shop, what were they going to tell him? once he studied and studied and to protect himself against looking like he was ignorant, he read the sources cutted by henry, a book about paper money

and inflation in france, and he lived through the green backism period himself after the civil war. he was young now on the train. he was an up and coming business mapp and inventer, and he had been through the crisis of 1907 so a lot of this was personal knowledge to him. he didn't have to be told watch out for wild inflationary schemes. what that means is he knew the dollar had to be backed or felt it had to be backed by something real. gold was the backing of the dollar of the day. you started by learning about the gold standard and the gold system. drafted on to that in the modern day is a banking system, your corner banks, retail banks, your commercial banks. then overseeing them since 1913, really 1914, only a six or seven years before is the federal reserve system created by the federal government to be a bank

for banks. yet they are not had time to operate in a notary public--- non-war period to really know how they would agent or for markets to know how they would act, and within the structure of the creation of the federal reserve itself was the evidence of long standing distrust of centralized power, whether it's private power in the new york banks or power in washington, d.c.. when the federal reserve was created, it was created as this kind of an attempt to compromise and diffuse power and spread that across the country. each was created with a federal reserve, headquarters district bank owned by its private commercial bank, and then aboard public interest served by a board in washington, d.c., and

by the board of governors to oversea the system and to harmonize its operation. in the early days, the frat reserve district banks were not looking to the board to harmonize interests. they could act somewhat aton mousily. it was later on there was quite a battle within the fed to bring more power from the federal reserve district banks from the board in dc. that's a different and later story. a lot of this information, of course, was well in history, and the federal reserve from allen to robert, and many others. the federal reserve is a relatively new institution, and the reserve district banks are finding their way. the new york city bank is fighting for position, got more power because of where it's

located. that kind of ran counter to what the framers of the federal reserve act hoped for, but reality what it is with all the financial markets in new york, that was bond to happen. well, back to edison. now, edison starts studying this complex, layering it, looking at it, realizing it's very complicated, and understanding that to get any practice call support -- practical support for major change, he's not able to cast gold out. he thinks gold and gold backed money is a mistake, but he also realizes you've got all of the bids and international community running on gold. you can't wake up one day and say, regime change, we're going to something different. his attempt is to draft on a plan to help farmers to stabilize their incomes, and hope that through time it grows

evolutionarily and becomes -- pushes gold out, so rather than throw gold overboard, he's going to draft on other commodities to back money in order to help in the way money helps the gold producer. you're a producer, go to the ground, pull out gold, have it manipulated -- mints into coins, and you have money. why can't the farmer go to the ground, pull out the crops, bring it to the government, and come home with money of the that was ford's idea. there's wheat, cotton, corn, and so on, and recommended that the government build warehouses starting with 12-14 across the country that the farmers could

bring their crops to, and receive an upfront payment of 50% of the crop value derped by an average -- determined by an average of its price over the last 25 years, and receive an equities certificate of ownership so the farmer leaves, let's say they put in a thousand bushel of wheat, average price is a dollar, that's # $1,000, leaves with $500 up front. he now can pay off their loans. the farmer's got something for certain. the farmer has the ticket. if the price of wheat goes up, the farmer with withdraw the wheat from the warehouse, sell it on the open market, and make the difference. you got to pay the government back the $500, but that was a self-canceling money inheadson's view, but make some money on the crops as well.

he devises the scheme and says where is the research team. the guy's in the battery shop are no good at this stuff so he sends a questionnaire of 26 questions to 17 businessmen, insurance company owners, federal reserve officials, and economists including william scot at the university of wisconsin, timer at princeton, harvard, well-known called money doctors of their day. peat -- patterson at pennsylvania, and, of course, not common household names today, but kind of sending them to the crews men of the day because he wants them to look at it and say, hey, am i right or wrong? will it fly, or is it a flop? these folks open up the

envelopes from west orange signed by thomas edison saying this is a 26 questionnaire sent out in early february of 1921. i got a questionnaire, would you take a look at it, answer the questions, and send the answers back to me? he gets polite answers from a few people. he doesn't hear from some others. he sends notes saying, hey, remember that questionnaire i sent you, can you answer? he gets fairly extensive answers from eight people. pretty good cross section of the bankers and businessmen and the economists. one economist writes back after getting the second letter saying being rude and impolite, edison writes scott from wisconsin, writes to the president of the university and says, you know, this guy basically told me senile, maybe i don't understand money, but i'm trying to, but,

believe me, i'm not past itment i'm not senile. scott writes back a very humble apology. that news hilts the newspapers causes kind of a statewide upset. there are not many supporters of scott, saying forget those guys. fer the academics. they never know what they are talking about, the equivalent of that. now, edison gets answers back. he not really outlined his speed totally to the experts. he just kind of threw different parts of it, questions out there, but they are able to kind of infer what the basics of the plan are and the basics of the plan are would it create sound money if farmers could bring crops to the warehouse and get immediate payment.

the general answer for most of the experts is that would be pretty inflationary. there's a couple problems. number one, you don't know how many crops might show up at your warehouse. this kind of a scheme might induce a lot of crops. you don't know. they might flow across the border. secondly, it works in an inelastic fashion taking money out of circulation when you need it, putting money in circulation when you don't. ..

cause more inflation. and finally the cost of building and maintaining the warehouses with interest-free loan, storage cost. generally edson got a lot of negative comments from the people he considered to be the professionals, and he spoke with bernard and roger which today would be called a technical analyst or chartist, market-oriented he predicted the 1929 crash, of course, that was later on. so in the end, there wasn't a lot of support for edson's plan. but he said well, you know, the support was for the gold standard. people said it's not perfect. it's what we know.

it's what we have got. and it's what we had. he wrote to a few people subsequently and said i better get back to my day jobs. i spent a couple of months intensively to this. i better get back to this. you wait in thirty years time, my scheme will look much more attractive. through the years economists have all opposed some sort of commodity-backed common. that doesn't necessarily make them right. but it certainly opens up the per view that edison wasn't just the cookie guy stumbling around in the darveg. with the inventive genus, he may have had something to say about strike to stabilize perhaps if not prices, stabilize farmers' incomes. now the federal government ultimately ended up doing that and so his lobbying efforts in

congress and behind the scenes weren't really taken up further, because the federal government ended up allowing the federal reserve to extend the loans to blanks based on farm credit as well as industrial loans or loans for businesses. and that was the first example of the federal reserve act becoming a little more expansion their or you might say quantity ive using in allowening them to extent the district loans based on different collateral than they had in the founding document. the federal government went in price support programs and other programs that supported farmers much more directly. and much more visibly that the farmer could see and subsequently hope for. and so steve -- which may have assisted the farmer but somewhat

instrictly at a relatively high cost were separated or addressed more directly by helpers farmers directly. in at day when they were a strong voting block helping them directly politically was probably a more efficient in terms of both getting way to go about it. so in temple -- terms of what edison's view says to us today, he was right around the gold standard. he was working in 1921, in 1933, the franklin rose vellets administration eliminated monetary gold circulation for all intents and purposes for the average guy on the street. that was the ends of the gold standard. they also, for international transactions revalued gold from under $21 and ounce of gold to $35 an ounce of gold.

there's an almost 70 percent inflation instantly. so if the gold standard just rock steady guarantee of a stable currency and the answer is of course not. it could be politically ma manipulating and has been and will continue to be. the only saving grace one might say it's obviously when they change gold's price or the price of gold changes. but edison was right, gold was cast out. what was put in the place? reliance on the federal reserve to manage money relatively stable. and if you look at what happened the price of the average price level through times of 1913, a dollar purchasing power in 1913 is roughly -- women, roughly 10

cents today. that might be a little bit high. and so how is the fed done? well, money has depushuated, but maybe in a more stable fashion. so it's kind of a two-edge sword. i think the last thing interesting about that is if you look at what the federal reserve is buying today, for example in the recent financial crisis buying toxic financial assets from financial firms and insurance companies at the time and so on, they are basically at the question is how much of those mortgage-backed securities would fit in a bushel basket that the fed is paying cash for? did they determine the price by average of the last twenty five years? we don't know. but the fed has opened up the array of assets it purchases

under quantity easing to include a lot about that -- well, they're not farm crops are crops of one sort or another produced by one firm or industry or another. and they have done this in order to bolster the financial system. it doesn't a dispositions on the fed right or wrong, it's if you look at this in a particular way, it looks a little edison to give the old inventer his do, maybe his prediction wasn't that far off. now, all of the response materials and the book is based on come from the thomas edison historical park in west orange, new jersey. they were incredibly helpful. there's another group at rutgers headed up by paul. the thomas edison paper project, and i participated coauthor for

the academic papers on this with douglas will at the university of washington at tacoma and one of the papers with the coauthor my guess is ten people in the world haven't read all four of those papers. so -- i wanted to tell this story. i wanted to tell the story in a way that would appeal to the intelligent reader who is not a trained economist. so if you're looking at this and saying that book is probably over my head, it probably isn't. but i think it's kind of a tale, it's a lively episode in edison's life and what also gives an appreciation for the issues and motivation of the man to try to use his inventeddive jen us in to help solve not just the problems of lightening or electricity which of course, those are huge, but in many fears of peoples' lives.

that's the last thing and all of us should take a lesson from this. he knew when to quit. if something -- interesting and still maybe worth pushing but you were pushing against a lot of resistance, give it up, let somebody else pick it up. you might be able to prove him right but you can work too hard, and get too lost in one idea. so i think it shows edson be edison in a context where we say thomas edison, money, who knew? i'll open it to up questions. [applause] [applause]

[inaudible] similar deflation episodes people were struggling with. farmers were backers -- very much against the banks of new york. did do you find any connection between edison's ideas and the populous movement? >> well, there are, and it's probably one of those things edison had a bit of idea because he's living through the time in the 1870s and 1880 westbound the southern alliance which was a farmers group proposed when they call sub treasury plan. it was a warehouse commodity storage plan. i don't think he knew about it.

he never said i'm borrowing from the plan. and we first learned about that thanks to a tip from my son steven who was reading about it in high school. but that also feeds in to what was going on as you suggest the whole populous movement and the other movements and all the different money movements at the time. and the free silver taking -- you will not press down upon labor this, you know, this crown of thorns. i'm paraphrasing. the 1896 democratic national convention. but the silver movement was about the rising political power of the west. as the territory became states and got two senators they suddenly became influentially especially in the senate. they had as much political power. and so the mining interest

especially in nevada, actually introduced by william randall hurst's father who was one of the first senators senators from there. they were pushing for a free silver movement to guarantee the price of silver. edison is coming out of, but not that he knows it, it's incredible tear mile driven by monetary questions, political questions, and by the time he comes up with the steam, you know, in a way -- they found this with the federal reserve almost like people didn't want to revisit and refight the fights they fought in the 1860s, 1870, 1880, there are these plans in and other plans, and but just all of these different currents and cross cuts that he kind of lands on not even realizing all of the stuff has happened. of course, he has the head in

the stock ticker an the lightbulb and the electronicification, and the movies, so he comes at it without the great background reading a little bit thinking he's done a fair bit of study. most academics would say having said. he didn't look at this stuff. but so -- there is a huge story out there and some very nice accounts of it. and the option to bet too is federal policy to help was a combination sometimes of monetary acts of the bland allison gold act as opposed to, you know, medal medallism. what they were doing with tariffs. if you wanted to help a group, well, you could put an tariff on imports on the competitor. it was easier to put tariffs on

the other goods than farm goods. so the farmers sometimes was caught in the middle. couldn't get a higher price for his output but had to pay higher prices for the protected machinery. so it just goes so many different ways. that's an, you know, that question keep people busy for a long time. [inaudible] [inaudible] >> well, right. and when we look at the short run it's a disappointing result the prices that fall over. and sometimes we don't even know. we have people today saying we're heading toward a deflation

paul, for example. the fed should be more activists more quantity other people think, wait minute, they set up a situation where there may be an rising inflation in the future. both what they're really debating is we don't think the purchasing power of the dollar is going to be stable. some think it's going to be evolve. some thingst it's going to be rising depending on if they think there's going to be an inflation or deflation. can you guarantee that in edison's analogy when you buy a poker chip at the table for a $1 when you cash it in you gate $1 for it. we love the poker chip able gi. sadly i think the answer is no. you have to put the faith and trust in the federal reserve creation of money and the fractional reserve banking system. be being able in a sense the people's desire to hold money is

going to do go. with are the rate of production is going to go. and in the short run the kind of run. you're trying to do something that can't be done. not longer run, there's probably hope for a stable -- [inaudible] but that may rely on different standards or different principles -- operating principles for a central monetary authority or -- totally different standards. that's a huge question. but we get useful thinking in government provided monopoly money as the only alternative. in the end it may not be. i'm not here to beat the band for yet another program if it can be done, nobody has zone it yet with paper money.

we have all these historical examples of failure from the chinese and the 1100 to to the germans in the 1920s to zimbabwe in 2002 to 2008. to argue teen that in the next coming place for inflation. [inaudible] [laughter] >> hi. i wanted to mention that i enjoyed your book, in particular the history about the federal reserve which i wasn't fully aware of my question is, what is the lentd between monetary policy and economic policy, is it different today than it was back in edison's time? >> okay. by economic policy you mean a phis cat policy or federal fiscal policy. >> exactly. >> the connection usually -- [inaudible] fiscal policy technically is a [inaudible] root word meaning curse.

if the government management of the purse and the money and a tax revenue and money expenditure programs. and typical that legislative and executive branches and wrangling that we see go on and so on. it monetary policy is how many collars are out there. and that's basically under the per view of the federal reserve system, which is it's created by a congressional act. it's an independent agency, independent of the fiscal authorities. and so technical those policies can be different but for an economy, of course, it's better that they be coordinated, for example, if in some theories if there's high unemployment and believe the government can do something about it. they should try to do something about it with both areas. if you believe they can't do anything about it. they shouldn't try to do something about with both policies. they should at least coordinate.

they are not always coordinated. and sometimes, and i would say today is one of those concerns, that fiscal policy and you hear this -- i'm echoes ben bernanke now, the federal chairman of the board of governor of the federal reserve system. when he goes to congress and says you have to come up with a credible fiscal plan going forward, that is credible so that people with can see you have a plan to bring the revenue and expenditure streams in to balance, because right now the expenditures are $1.1 trillion greater. he says the following reason not because he wants to say, read your monetary policy. we're doing it well and you are thinking up a fiscal policy. he's saying that because if they continue to rub the large deficits, the only way they can get financing is by borrowing because the deficit by virtue of

the fact says we're not taxing enough to cover it . what do we do to cover it? borrow. when we borrow we're going to issue iou or bonds. beer nann key and the fed are concerned that the day is going to come when they are the only people left to buy the bonds. and that forces their hands, that their being put in a tighter corner. if the day comes that except at low prices people will buy the bonds, meaning high interest rates and of course high interest rates, you know, run against having any ability to fight a recession or weakening recovery. so if the day comes that the fends the last buyer of the federal government bonds, not that i think that day is near. but beer nann key wanted to send the mess an. don't rely on us. they print money. that then becomes edison's

warehouse. i'm buying bonds from the u.s. government. how many fit in a bushel basket. here is the cash and the fed warehouses the bonds and the money is out there, you know, floating around. and what the federal reserve is worried about within and i think probably rightly so. they basically become subsidiaries to the fiscal plans of the federal government and what they don't see is an incredible fiscal plan at least listening to bernanke's words. thank you. >> no, thank you. >> yes, a question here, do you think thomas edison's proximity in new jersey where the manufacturing and home was to new york city was the financial world, wall street, et. cetera, influence and the fact that he

didn't always get finance for the production, do you think this is a possible reason of his interest in another financial system or to the gold, necessarily? >> i don't know what was the location was. i think the experience with the finance years, you know, in all the big names, not the vanderbilt and jp morgan. he felt that he had gotten bushed a few times. he also knew they were the only ones there, and you had to give something up to get something. but what he didn't -- what a lot of people don't going back to aristotle and that got transferred through [inaudible] to marx not that these are necessarily all great thinkers but big thinkers and big names. was the idea of paying interest. you couldn't see it.

why did you have to pay interest with a view being toward that gold was saying i'm paying interest on is just sitting there. it's not doing anything. he could see why you have to pay -- it comes and does something. but what is gold in a vault doing. sitting there? why should the banker, the money broker, profiteer get to charge interest for it. he wanted to design not a non-financial system. he wanted to get -- he really thought and first the invention of -- [inaudible] and he wanted to divide the monetary scheme which would phase the farmer from the interest terror. now that's like going to a car rental agency and saying hey, you know, that car is sitting there. why don't you trebt to me for nothing. what does the car rental agency say? yeah, dave, that sounds like a

great idea. here the big problem. the guy standing behind you, he might pay us to rent the car. that's where edison and the antiinterest people kind of businessessed the boat. the money is sitting in the boat but the guy standing behind you might want to use it. so you have to bid it away from him or her. the same -- we don't get rental cars for free. they're sitting on the lot. you can see them. somebody might walk up in three hour's time and rent the car. if you have it, they can't rent it out. i think edison -- and edison missed a boat a little. he also wouldn't rent or sell cars on the installment plan until he was finally forced to by chevy in the 1920s. ford didn't want the buyer to get in over the head. it's also true probably and i

heavy society two-thirds of the population was on the farm. how do you repossess a car that the farmer stops making payments on? where do you find the car? in a 1600 acre farm? it's around. good luck. right. it just doesn't work as well on the farm as it does in the city. i think it was more the interest as opposed to, you know, being located. i think it was close to new york city because the facilities, the work force, and the -- he loved writing to poem. we have evidence of in new. if you're in new york call and we'll give you direction, come see us. >> we're being more pragmatic than the people on wall street. >> well, i think we're all say -- [inaudible] that's one thing edison wrote. the -- [inaudible] they knew exactly what the banker was doing. he sunt the intent that is bad.

it's the system that is bad. i'm thomas edison. i'm going invented a system that makes an act good. we know people who are following incentives. let's see if we can design a system with a checks and balances that makes them act in a way where they don't profit fear and so on. >> yeah. i'm curious about edison's political view points in general, you know, specifically the role of government today you have sort of paul on one side and prohibit call spending and progovernment intervention using government spending and actually government going in building highways, doing thing in the economy physically. on the other side you have, you know, ron paul and rand paul against that. no role for him. we don't need the roads. we'll do it ourself. if there was an ultimate fiscal

championship that paper view improvement on the one side and ron paul on the other. where would he fall in the general viewpoint of the role of the government? probably a little more political scientist. let me give you a view. he lives a long time. he was born in 1947 and because he was a well-known, you know, if i -- famous. they do the survey of the famous guy. they report to the lab on the birthday in february of every year. they say, what was the thing that happened over your last year. and in 1914 in february, he said, you know, the biggest thing that happened was the federal reserve act that was passed in december of 1913. this was before the federal reserve system got set up. nobody knew what it was going to be. what it might turn in to.

what it is now is much different than what it was designed. as he didn't say congress ought to keep their hands off of it. he thought that was just what was needed. in order to curve the private power. we're getting back to the previous question. i think he thought the profiteers had too much. did he want the government to take it over entirely? i highly doubt it. i think he thought the regulatory movement, you know, he really had hopes for it. to the point where, you know, that was the thing he mentioned. i think most people in early 191 wouldn't have been thinking federal reserve. on the flip side when the sherman antitrust act out -- he thought it was written by a bunch of lawyers that knew nothing about business. again, i don't think his angle was -- they should get out of it entirely. i think his angle they should

have consulted with some of the business people to craft a better act. because he thought ther is man antitrust act. i think edison would come down on the kind of hardin cool a.j. view that we get out of recessions one person at the time locally, new nice my, statewide, and we don't look to the federal government for job creation. but that we do look to [inaudible] that assist everyone that aren't loaded against let's say the -- [inaudible] or even loaded for the farmer in that respect. so i think it puts in straddling, if you will, he recognizes there's a role, he

recognizes there's a federal role. but that in terms of today's action and activism, i would think he would just be astounded. yeah. he's going have to speak for himself. there's probably a stack of documents where that someone is writing. thomas edison and fiscal federalism or may be in one of the edison projects. and but -- [inaudible] >> do you want me to give a -- i certainly want to thank everyone for coming. if you got the book and enjoyed it. thank you. if you don't have the book for those not here,