Finance Makes America Great, Say Larry Summers, Joe Ricketts

Different takes on how finance makes America great had about 450 guests perking up their ears Wednesday evening.

Two perspectives came from the honorees at the annual gala of the Museum of American Finance in New York: Larry Summers, former Treasury secretary under President Bill Clinton and director of the White House National Economic Council in the Obama administration, and Joe Ricketts, a billionaire entrepreneur and Republican donor who backed President Donald Trump, and whose son Todd has been appointed deputy Commerce secretary.

Neither honoree referred to Trump directly, but their pointed words in the second busy week of Trump’s presidency were hard to miss.

“It was two political speeches from different sides of the aisle,” said Tim Hockey, chief executive of TD Ameritrade, as he picked up his coat at the end of the evening.

Guests included hedge-fund titans Paul Singer, Ray Dalio and Ken Griffin, whose Citadel Securities is TD Ameritrade’s market-maker.

Ricketts opened in a folksy manner recalling a sociology teacher of his in the ’60s who said America is rich because of its natural resources. “When I got out of school into the real world, I found out, you know, that really wasn’t true,” he said. “The thing that made us strong and prosperous was free enterprise. And free enterprise doesn’t happen without finance.”

Then Ricketts told of founding the online brokerage service that became TD Ameritrade, giving millions of individual investors access to the stock market. He started out in Omaha, Nebraska, recruiting his wife Marlene, a teacher, to take orders because he didn’t have money to hire someone.

Key to the venture was the May 1, 1975, deregulation of the brokerage industry, abolishing high fixed fees for trading stocks.

“Because of that, I want to point out -- an elimination of a regulation -- we had the industry take off,” Ricketts said. “So as we take a look at what our government does, if we eliminate regulation a good share of the time, we’re going to benefit greatly.”

The remark earned applause around the room.

Summers also earned a few rounds of applause, though possibly from different sections, when he outlined “principles that are especially important today,” as he put it.

“First, negotiation, exchange and interaction are not a zero-sum game,” he said. “I sell something, I’m better off getting the price. I buy something, I’m better off getting the thing.”

Second, “finance and economic life work best when they are based on openness, transparency, principle and are free from political motivation,” Summers said, adding that independent central banks, strong currency, common rules, and “no ad hoc threats or bribes from public officials, no matter how powerful, are what make the market system function best.”

“There’s something else you learn at the Museum of American Finance,” Summers said. The U.S. is an exceptional nation “because of what it has strived to achieve for the last 75 years in the global system.”

Both honorees were clear on the importance of supporting the museum, with Summers especially citing the wisdom that comes with knowing the history it tells.

Founded after the 1987 stock-market crash by John Herzog, the museum has inspired others. China has several, but the U.S. has just this one, said David Cowen, CEO of the museum.

Displays have included a copy of the Dodd-Frank Act, deal toys and an antique cash register. Of course there’s a room devoted to Alexander Hamilton.

It is nonpartisan.

“We’re for finance, and finance doesn’t have a lot friends,” Cowen said.