Memo From the White House to the Federal Reserve

Note: I cannot reveal how this interesting missive came into my hands.

To:the Board of Governors of the Federal Reserve System From:Karl Rove, the White House Date:July 19, 2002


The President was very supportive during his recent visit to Wall Street. Well, from here on in there won’t be any more of this "Mr. Nice Guy" stuff. President Bush has lost patience with the dismal performance of the equity markets and now demands that this situation be reversed immediately.

Given the success of his War on Terrorism, the President is formulating an Equity Protection Board (EPB) that will seek out and destroy all enemies of the equity markets. Ralph Nader and Patrick Buchanan are possible choices for the agency’s Czar. The prosecutor will be, of course, Rudy “Benito” Giuliani.

Effective Monday Morning, July 21, 2002:

  1. Brokerage firms will be prohibited from dealing in short sales and any violators will be dealt with as felons. Any corporate official who sells his own company’s shares will face lethal injection.

  2. "Bad-Mouthing" — speaking negatively about any aspect of the equity markets — will be considered lewd behavior and the perpetrator will be subject to fines and imprisonment.

  3. At the start of the business day in every financial institution, all present will recite a short pledge of loyalty to the government and the equity markets. (No reference to God will be included.)

  4. Any customer who seeks to sell a stock must provide documentation that he faces some emergency. A panel comprised of a physician, a mortician, a man of the cloth, and a bookie will judge if the need is sufficient.

  5. All media outlets will be required to devote at least 25% of their time and space to positive articles and pronouncements about the stock markets. Since this is War, all public figures and celebrities will be required to travel the nation appealing to people’s patriotism under the slogan, "Your Country and Your Stock Market Need You." A plan to extend this program overseas, headed up by Tom Hanks, in the spirit of WW2, is under study. Until a better name for the project is conceived, it will be called the USO.

  6. In every public school across the nation children will buy stock, even if only a few cents worth each week. They will be exposed to this act of patriotism from the first grade and if the little ones feel that their parents are not sufficiently enthusiastic about the program, teachers will encourage them to report any such deviant thinking. Indeed, they should all be enrolled in the Youth Division of TIPS.

  7. Throughout the business week, at every opportunity, corporate leaders will be humiliated and serious consideration is being given to publicly executing one per week. Your nominations are welcome.

Your government has already fired the first volley in this War. Yesterday, whilst most citizens spent their Sunday relaxing, this Administration was rolling out the "giants" to appear on the network and cable news shows. Dazzling performances by talking head Neil Cavuto, Richard Grasso, CEO of the New York Stock Exchange, Congressman Dick Armey, and others made the selling of securities today by anybody very unlikely.

Your government also took decisive action so that the market makers in Asia and Europe get the message loud and clear. Collapsing equity markets will not be tolerated. The US Sixth Fleet raised anchors for Japan and American troops began military maneuvers in Germany.

Market stability is this government’s primary goal, but be assured that no bank, brokerage house, or other financial institution will be allowed to fail. Nor, will your jobs or any government program be in jeopardy.