When Franklin Delano Roosevelt called upon Joseph Kennedy in 1934 to head the newly created Securities and Exchange Commission, surely there were those for whom foxes and hen houses alarmingly came to mind.
Remember, before the SEC started building regulations, corporate reporting on income, assets, expenses, liabilities and the like was akin to the Wild West.
So “insiders” had what historian David Nasaw in his new biography, “The Patriarch: The Remarkable Life and Turbulent Times of Joseph P. Kennedy,” calls, with some understatement, “an unfair advantage.”
And Joe Kennedy surely knew how to take advantage. The blue-eyed Irish charmer learned how to make connections and how to use them — and by “use,” Nasaw means flatter, entice, cajole, manipulate or bully.
With the knowledge he garnered from his growing range of contacts in banking, shipping, Hollywood, whiskey imports and practically everything else, Kennedy bought where he reckoned he could profit.
“His ability to juggle numbers and accounts was remarkable,” Nasaw writes. “So too was his capacity to profit from a booming market.”
He became more savvy in the ways of early 20th century capitalism, and his appetite grew:
Joe Kennedy was learning how to skate along the edges without falling in. As president of Columbia Trust (for example), he had immediate access to capital and credit, which he used not only to finance his mortgage and real estate dealings, but to purchase stock. As the economy righted and then boomed in early 1915, his fortunes soared.
… “I was afraid the market would close before I had all I wanted.”
He “bought on bad news, sold on good news,” Nasaw notes.
By 1928, Kennedy was a multimillionaire. He enjoyed a life Jay Gatsby might have envied.
And none of what he did to reach this pinnacle, Nasaw continues to point out, was considered unethical or against the law. That is, until Joe Kennedy made it so.
FDR and Kennedy had become pals, of sorts, during World War I when the future president was assistant secretary of the Navy and the father of a future president was general manager of Bethlehem Steel.
FDR viewed the SEC as a means to national recovery from the Great Depression. He believed Kennedy, a moneymaking scoundrel of the first order, an ideal candidate to contend with all those other Wall Street characters.
The president was right. Kennedy knew all the fraudulent, questionable backroom ways of stuffing the pockets of finance’s fattest fat cats. Who better?
But Kennedy’s other goal during his two years as SEC chairman — along with tying up as many nasty loopholes as he could get his fingers around — was to make corporations feel good again about doing business.
Corporations distrusted FDR, the father of the New Deal. But Joe Kennedy was truly one of them.
“Do business as usual,” Kennedy urged Chicago business executives in 1935.
Kennedy outlived four of his children, and spent his final years disabled by stroke, able to speak only a single word: “No.”