GET USE TO IT

Like a huge reptile, Wall Street is this giant beast that has to be fed.

The fare of choice is elastic money supply. An investment banker's worse nightmare is inelasticity. If you want to make a Wall Street banker gag, forget maggots or Paducah or your name, just mention inelastic money supply. But be prepared to perform a Hemlich if you do--unless, that is, you're not feeling particularly charitable that day.

The ties between Wall Street and the Fed are ties that bind. They date back a long way. In the beginning a Wall Street banker said: Let there be a centralized bank. And there was, two of them to be exact, both put to rest by public demand, the first after a 30 year run in 1811 and the second in 1836 following a turbulent 20-year stint and a public onslaught by President Andrew Jackson, a Democrat, a hard-money advocate and big-time foe of centralized banking.

Instead of an amen! Somebody give me a: "My how times change."

After a long hiatus the bankers as is their want we're famished. The National Banking System then in place, a brainchild of their own machinations several years earlier, wasn't cutting it. It wasn't bad. But it could be better. Centralized is to rules as rules are to who's defining them. And in this case it wasn't the bankers and it wasn't centralized enough.

To create inflation otherwise known benignly as booms you need elasticity. That's what bulging waistlines are all about. Investment bankers love their own brand of spandex. It's spelled bonuses. And in good times they come often and big.

What this world needed was a "lender of last resort," a pseudonym for too big to fail, a self-perpetuating credit expansion device controlled by bankers. A money multiplier known in less civil circles and the underworld, it's called a pyramid. The piper keeps playing until redemption day. Those old black and white photographs of long lines outside the nation's banks during the Depression era, that's redemption day.

Back then money was supported by gold and silver. An a small kid with a paper route you had to go door-to-door once a week to collect. It taught you a lot of things. How to make correct change without a computer was one. Another was how common dollar bills with the words "silver certificate" printed on the front were. It you own one today it's a collector's item. Guard it with your favorite bureaucrat's life.

So it was 100 years ago this December our current central bank was birthed. Apologists will say after the Panic of 1907 when banks were caught holding the Old Maid, something suppose to happen only to buffoons and neophytes, the call went out. Truth and facts are stubborn things. The call really started in 1896 right after McKinley defeated the silver-tongued, silver-backing William Jennings Bryan.

As with any change people must first be convinced it's needed. Fear usually serves the purpose quite well. Heroes needs villains. Preachers sinners. And Wall Street bankers need those bonuses.

So short of any serious, meaningful overhaul, look for more boom and busters. Get in, buckle up and get use to it.