Frank Thoughts: The Wizard of Oz
Frank Boland
October 16, 2020

Ben Gaines and I approached the front door of the Union Club of Boston. Ben was a political commentator from Washington with a heavy Yiddish accent. And I was a 25-year-old Irish kid from public housing with a bad Boston accent. A butler opened the door for us. The club was a total bastion of Boston investment Brahmins. These people were from families that had cities named after them. Peabody. Lowell. Quincy. Once inside the club, we would hear nothing but prep school accents. The word God sounded like “Gawd,”In retrospect, we were both nervous. But I had more reason. Ben, in less than an hour would, momentarily, offend all these people. And in 1968, they were our clients.

We were shown to a private dining room with a large white marble fireplace at one end and a view of Boston Common and Beacon Hill at the other. The paneled walls were covered with oil portraits of men from the 18th century. The 20 or so men in the room then ruled the investment world. John Quincy Adams IV was the Chief Investment Officer of the John Hancock Life Insurance Company. As a young stock broker, I covered the American Mutual Insurance Co. My investment contact’s name was Myles Standish. He was a direct descendant. Is it any wonder Ben and I felt socially uncomfortable?

When lunch was done, Ben got up to speak about the just completed Presidential election. Nixon had won. As silver spoons clattered against 200-year-old coffee cups, Ben walked a full circle around the entire table ultimately stopping in front of the white marble fireplace. “How many of you voted for Richard Nixon?” he asked. Of course, every hand at the long table was raised. Using the heaviest Yiddish accent he could produce - and he could be very theatrical - Ben quickly walked to the other end of the table and shouted at these Brahmins, “You’re idiots! You should all go home tonight and fall down on your knees and thank God your parents died before Roosevelt passed the inheritance tax. There isn’t enough brain power in this room to run a Lionel train set from this end of the table – pointing his finger – to that end … one way!”

Sitting next to my boss, I felt him stiffen. I suddenly knew what the phrase “dead silence” actually meant. With my eyes closed I heard someone snicker.  As I opened my eyes, I saw Ralph Lowell – the most senior patrician in the room – start to laugh. As he erupted, the entire long table exploded. I was surrounded by 60 year old men laughing like school boys. Even my boss felt he could laugh. I didn’t.

That day Ben delineated all the reasons he felt a President could have little direct impact on the economy or the stock market. He would be prescient. Within weeks of our lunch, the two-year-bear market of 1969-1970 would begin. In November 1972 Nixon was again elected President. What followed in, 1973-1974, was the worst bear market since the depression. Ben’s main point that afternoon – “the stock market often moves inversely to political expectation” – was totally proven.

That lunch was the beginning of my political agnosticism. It was in 1974 that I realized there would be no Wizard of OZ behind a curtain directing the economy or the stock market … from either party.

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