In his July 21st interview, Wanta explains how he made these trillions of dollars, and now after listening to it carefully, it makes even less sense than it did before. As best as I can tell he claims that he was assigned by President Reagan to destabilize the Soviet ruble, which he did by forming a corporation and buying up rubles at a discount rate. For those of you who are not familiar with Soviet economics, the ruble was not a freely convertible currency. The only way to exchange rubles for hard currency, was to go through the Soviet government, and pay the rate that they set. Through much of the 1980s it was around $1.20. This did not represent its real value though, as its black market value was only a fraction of that, but other than small back alley deals, that is what you were stuck with.
Anyway, Wanta claims his firm went around Europe and bought up all the rubles at discount rates, 20 cents on the dollar. He then bizarrely claims that because of this the Soviets ran out of rubles, and were then forced to turn around, and pay over a dollar a ruble for his stash. This unfortunately makes absolutely no sense whatsoever. The Soviet government controlled the value of the ruble, they could print as many as they wanted. Hard currency on the other hand, was very precious to them, the only way they could get that was to sell their natural resources, such as oil and gold to the west. The idea that Wanta would profit by forcing them to trade something precious, for something that they could just create at no cost, is just silly. Wanta then goes on to explain some other nonsensical plot where he managed to wipe out the Soviet gold reserves and pay back third world debt. I still don't get that part.
Wanta spends much of his time talking about the benefit to the US economy when he returns his mythical $4.5 trillion. Personally, I see no benefit other than massive inflation, but I will humor him. He doesn't bother to do his math though. He claims he will bring back the money, pay a federal 35% tax rate or $1.575 trillion on the money, plus corporate tax to the state of Virigina. On the remaining funds he then claims he will make $96 billion a day after taxes, with an equivilent amount paid in taxes. I thought that perhaps he mispoke, but he said it more than once, and one of the websites supporting him repeats the claim:
By specifically impeding the payment of tax by Ambassador Leo Wanta (an initial $1.6 trillion to the Treasury, followed by amounts estimated at $96 billion per banking day thereafter, and an estimated $270 billion to the State of Virginia), the President of the United States and the Treasury Secretary have signalled to taxpayers throughout the United States that the US tax system is grossly unfair.
Let's do the math though, $4,500 billion - $1,575 - $270 billion = $2,655 billion
And on that capital he claims to be able to make a pre-tax profit of $192 billion a day. There are 254 trading days a year, so 254 x $192 billion a day = $48,768 billion a year! Wow, that is return on investment! An astronomical 1,567% a year. And I thought I cleaned up making a 40% return on oil stocks last year. Never mind that the GDP for the entire United States last year was a piddly $11, 750 billion.
Yeah, this guy is credible.
Oddly enough, Wanta stutters badly through most of the interview. I only bring this up, because of the Insight Magazine article I posted earlier.
New Republic's letterhead features a fashionable address in Vienna, but Wanta's phone rings in Appleton, Wis. In a two-hour conversation, he attributes his start in politics and finance to the kindness of the late Sen. Alexander Wiley, a Wisconsin Republican, who sent him to Dale Carnegie to cure a stuttering problem. He mentions various careers as a high-tech defense engineer, deputy in the Waukesha County sheriff's office, a Milwaukee policeman, stints in the Nixon and Reagan campaigns, adviser to the Drug Enforcement Administration and as a perennial candidate for various Cabinet and sub-Cabinet posts.
More on the other two characters later.