White Collar Crime Final Study guide I Free Markey Economy Laissez Faire Capitalism Free Markey Economy prices of goods and services set by vendors and consumers with no government control Laisses Faire Capitalism government leaves people alone regarding economic activity separation of economy and state 1 Adam Smith Wrote An Inquiry into the Nature and Causes of the Wealth of Nations which was a precursor Father of modern economics to modern academic discipline of economics promotes self interest and competition 2 An Inquiry into the Nature and Causes of the Wealth of Nations Describes what builds a nation s wealth Discusses division of labor productivity free markets a The invisible hand an individual s efforts to pursue their own interest may frequently benefit society more than if their actions were directly intending to benefit society b Enlightened self interest a person who acts to further the interests of others ultimately serves their own self interest vs Greed is good misinterpretation of Smith s beliefs 3 Ayn Rand Wrote Atlas Shrugged 1957 which was about reason individualism and capitalism vs Leader of the libertarian movement In favor of complete separation of economy and government government and socialism Proposed rational self interest Called her philosophy Objectivism Had a group of followers one of them being Alan Greenspan 4 Charles Austin Beard Wrote An Economic Interpretation of the Constitution in 1913 II Believed the founding fathers were motivated by economics not by philosophical principles The Gilded Age and the Robber Barons When the Economy was separated from the Government Gilded Age late 19th century rapid economy growth but also poverty and inequality serious social problems masked by a thing gold gilding Robber Barons term used to describe wealthy businessmen who used exploitative practices to get wealthy often considered philanthropists John D Rockefeller Controlled Standard Oil Richest person in U S history 1 Was worth 336 billion in today s dollars Monopolized in order to control all of U S oil sales 2 Cornelius Vanderbilt railroads Was originally a steamboat entrepreneur Was worth 143 billion in today s dollars 3 John Pierpont Morgan banking Built the NY Central Railroad Formed General Electric Helped create U S Steel Corporation merger between Federal Steel Company Carnegie Steel Company and others first billion dollar company in the world 4 Andrew Carnegie steel Built Carnegie Steel Company 1892 and sold it to J P Morgan 1901 for 480 million equivalent to 13 7 billion today Considered a philanthropist Jay Gould railroads 9th richest person in U S history Controlled Union Pacific and other railroads Took control of Erie Railroad from Vanderbilt but was later forced out By 1880 he controlled 10 000 miles of railway 1 9th of U S rail Reaction to the Robber Barons The Progressive Era Progressive era 1890s 1920s social activism political reform in the U S main goal was to eliminate corruption in the government regulate monopolies and allow women s suffrage 5 III Became president after McKinley s assassination in 1901 1 Theodore Roosevelt Nominated as President by the Progressive Party Bull Moose Party of 1912 2 The Panic of 1907 NY stock exchange fell almost 50 from its peak the previous year U S financial crisis caused by Wall Street similar in this sense to the financial meltdown of 2008 Started with the failed attempt to gain control of stock of United Copper Company downfall of Knickerbocker Trust Company regional banks withdrew reserves from NY City banks people withdrew deposits from regional banks J P Morgan the man bailed out Wall Street After the Panic of 1907 the Pujo Committee investigate J P Morgan the money trust idea that the world s wealth is controlled by a powerful few and Wall Street Ferdinand Pecora was Chief Counsel of the Senate Committee during the investigation Committee determined that a group of financiers had gained control of numerous industries through the abuse of the public trust Roosevelt failed to receive Republican nomination but was nominated by the Progressive Party 3 Election of 1912 Roosevelt Taft and Wilson William Taft re nominated by the Republican party Woodrow Wilson nominated by the Democratic party and won the election 4 Platform of the Progressive Party Goal was to dissolve alliance between corrupt business and corrupt politics a b Registration of lobbyists c Social welfare system for senior citizens unemployed disabled d Expanded rights for unions e Women s rights minimum wage right to vote f Commission to regulate securities Securities and Exchange Commission 1934 g Relief to farmers Limits and disclosure requirements on political campaign contributions Constitutional amendment to allow for federal income tax and inheritance tax Election of U S Senators h 8 hour workday i j k Recall elections citizens can remove elected official before term ends l m Initiative to create laws voted on by voters citizens may propose a law by petitions and enact it Referendums to reverse legislative laws citizens may decide on a law by popular vote by popular vote n Reduction in tariffs tax on imports exports o Regulation of corporations Federal Trade Commission 1914 5 Federal Reserve Act of 1913 Reform of the Progressive Era Created the central bank of U S for the first time since Andrew Jackson s veto for the second bank of the U S Florida s Banking Crash of 1926 J R Anthony 1 Was able to develop along with his 2 brothers Florida banking system because of his connection to Ernest Amos and William Knott Known as King of Chain Banks Opened the First National Bank of Miami with the Bank of Bay Biscayne being their only IV competition Wanted to locate the bank on the Anthony block Sold their bank stock to a group headed by Romfh in 1905 Received next charter in 1921 for the Miami National Bank After Panic of 1907 he formed the Bank of Palm Beach later renamed Palm Beach Bank and Trust Company Partnered with J R Anthony 2 W D Manley Head of Witham Chain banking system Helped organize the Bankers Trust Company and became the president Named President of Farmers Traders Bank Manley Anthony Banking System crashed in 1926 3 4 Ernest Amos Did not have sufficient banking experience to qualify him to be state banking commissioner Indicted for misuse of the bank s funds Known as the mad banker James Smith Vice President of Farmers Traders Bank Close friend and partner of W D Manley A principal of the banking system and President