FT217: “If you want to know what it was like living under an absolute monarchy just think of the IRS.” —Old Pithy

Posted by PITHOCRATES - April 11th, 2014

Fundamental Truth

Thomas Jefferson wanted to keep the New Federal Government and Money Apart

Thomas Jefferson did not trust government.  And he didn’t trust moneyed men.  Because when the two come together they cause nothing but trouble.  That’s why he hated and distrusted Alexander Hamilton.  Hamilton wanted a strong central government.  A central bank.  And an economic system favoring merchants and bankers.  With big city moneyed men financing the government in return for special favors.

This is why the nation’s capital isn’t in New York City.  It once was.  But one of the first deals the Hamilton and Jefferson camps made was the relocation of the nation’s capital to a mosquito-infested swamp on the Potomac River.  A long, long way from the moneyed men in New York City.  To try to keep the new federal government and money apart.  To restrict the influence of the moneyed men on the government.  And to prevent the government from having easy access to big money.

Why did Jefferson want to do this?  Well, they fought for their independence from Great Britain.  Which was a constitutional monarchy.  Where some in Parliament were no friends of British America.  And got the king to agree with them rather than the pro-British America faction in Parliament.  Ironically, the Americans got help in their War of Independence from France.  Which had an absolute monarchy.  Whose king ruled with no check on his power.  Both governments were in the big cities.  London.  And Paris.  Where the moneyed men were.  In the big cities.  Allowing these monarchies to do a whole lot of mischief all around the world.  And a fair amount of mischief inside their own countries.  Because the money and the government were in the same city.

Government + Money = Corruption

Great Britain and France were forever at war with each other.  And with other countries.  Requiring a lot of money.  Which they got from the moneyed men.  In return for special privileges that allowed them to get ever richer.  Of course the mischief grew greater as they fought a world war or two.  Requiring ever more money.  Which they got from, of course, taxing the rest of the people.  Even those who could little afford it.  And once this starts, once the government starts accumulating debt, that taxation will only get greater.

This is what Jefferson was worried about.  And why he so distrusted Hamilton.  The Founding Fathers were all gentlemen of the Enlightenment.  Disinterested public servants.  Honorable men who would never take advantage of their position in government for personal gain.  Because for these men honor was everything.  Some even fought duels to protect their honor.  As Hamilton did.  And died.  Washington, Adams, Hamilton, Jefferson, Madison, Jay and Franklin were men of exceptional integrity.  Men who could be trusted.  But here is where Hamilton and Jefferson differed.  Hamilton believed only men like them would ever enter government.  While Jefferson believed that government service would one day attract mostly scoundrels and knaves.

Of course, Jefferson was right.  For as the nation grew so did the size of government.  And the need for great big piles of money.  Which the moneyed men provided.  In exchange for special privileges.  Patronage.  Lucrative government contracts.  Etc.  Big piles of money flowed into Washington.  And favors flowed out from Washington.  With many a politician getting rich in the process of getting rich moneyed men richer.  Politicians who used their position in government for personal gain.  Corrupted politicians.  As government + money = corruption.  Which is why politicians always leave office richer than when they entered office.

Power + Corruption = Tyranny

This is how it started.  As the size of government grew corruption grew.  Just as Jefferson feared.  All that money flowing into Washington corrupted ever more politicians.  Who were not gentlemen of the Enlightenment.  But the scoundrels and knaves Jefferson knew would come.  Who used their position in government for personal gain.  Whose corruption grew so great it exploded federal spending.  So great that taxes from the moneyed men AND the middle class were unable to fund it.  So the taxation grew more aggressive.

The government created by the Founding Fathers had no income taxes.  They funded the few things the new national government did with tariffs for the most part.  People lived from day to day without any fear of the taxman.  The United States even did away with debtors’ prison.  Prison where people were sent who could not pay their debts.  A relic of the 19th century.  Sort of.  For there is one debt people can still go to prison for not paying.  Past-due taxes.  For the IRS can take everything you have and imprison you if you don’t pay your taxes.  And those taxes have grown great as of late.  As the tax code has grown convoluted.  Requiring businesses to hire armies of accountants and lawyers to comply with.  So the government can help the moneyed men who help the government.  In return for special privileges, of course.  Leaving the masses dreading April 15.  As they dread opening any letter from the IRS.

If you want to know what it was like living under an absolute monarchy just think of the IRS.  People fear the IRS.  Just as people feared the arbitrary power of an absolute monarchy.  A king could take your property and lock you away.  Just like the IRS.  And if you spoke out against the monarchy the king could make your life really unpleasant.  Just like the IRS.  During the 2012 election the IRS targeted conservative political groups to stifle their free speech.  Delayed their tax-exempt status approval.  And harassed them with costly tax audits.  And now their tyranny has extended to people in the middle class.  Who unbeknownst to them had a family member owe the federal government.  Years earlier.  Even a generation earlier.  And the IRS is arbitrarily seizing the tax refunds from these debtors’ distant relatives to pay these debts.  Even though they are in no way responsible for these debts.  And the government has no documentation for this debt.  Doesn’t matter.  Because they have the power to do this.  And these people are powerless to stop them.  Just like people living under an absolute monarchy were powerless to stop their king from doing anything to them.  And this is what Jefferson feared.  For after corruption comes tyranny.  For power + corruption = tyranny.  (Just look at every tin-pot dictator that has oppressed his people).  Which is why people fear the IRS.  And the federal government the IRS is beholden to.  Because they have become everything Jefferson feared they would.

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John Adams, George Washington, Alexander Hamilton, Thomas Jefferson and James Madison

Posted by PITHOCRATES - January 21st, 2014

History 101

The Inauguration Date was originally in March to allow for Long Travel Times

It was difficult to be a career politician at the federal/national level at the Founding.  Thanks to the horse.  The primary means of transportation over great distances.  Either on horseback.  Or pulled in a buggy.  Neither of which provided for a comfortable ride.  With that discomfort compounded by the fact you were leaving family and friends behind.  People you wouldn’t see again for a very long time.

When John Adams served in the Continental Congress he rode for some two weeks through brutal winter weather on hard, frozen ground.  Ground so hard and dangerous that they let the horses only walk.  Whether it was traveling to Cambridge to meet with the newly appointed General Washington facing off with the British in Boston.  Or riding on to the federal capital in Philadelphia.  The ride was long, brutal and cold.  As well as lonely.  For Adams missed his wife and family when away serving his country.  Which he did often.  And longed to return home.

James Madison was a Virginian.  And hated traveling up to the federal capital in Philadelphia.  And then later in New York.  For he hated being away from his wife.  And he hated those long rides on hard, bumpy roads.  As Madison suffered from some digestive disorders.  Leaving him with chronic discomfort in his abdomen.  And lower.  For he probably suffered from hemorrhoids, too.  Making those long, bumpy rides unbearable.  This is why the inauguration date was originally in March instead of January like it is today.  They had to allow for long travel times and bad weather for the new office holders to get to their offices.  Unlike today where you can fly from anywhere in the United States to Washington D.C. in one day.

James Reynolds had his Wife seduce and sleep with Alexander Hamilton so he could Blackmail Him

George Washington was president when the nation’s capital was in New York City.  Which was a long way from Mount Vernon.  Washington’s Virginian home.  Other Virginians were the first Secretary of State.  Thomas Jefferson.  The first Attorney General.  Edmund Randolph.  And the first Speaker of the House.  James Madison.  While the first Vice President, John Adams, and the first Secretary of War, Henry Knox, came from Massachusetts.  The first Treasury Secretary, Alexander Hamilton, on the other hand, was a New Yorker.  Living in New York City.  Close to the capital.

Ironically, the man closest to his wife was the one to have an extramarital affair.  Alexander Hamilton.  Who was targeted by a couple of con people.  Mr. and Mrs. Reynolds.  That’s right, Mr. Reynolds used his wife, Maria, to seduce Alexander Hamilton.  Including actually having sexual relations with him.  Just so he, James Reynolds, could blackmail Hamilton for money.  Threatening to tell Hamilton’s wife.  And ruining his good reputation as a gentleman if he didn’t pay. He paid.  For awhile.  And with his own money.  Reynolds was later arrested for counterfeiting.  And told the opposition party of Hamilton’s affair.  Thomas Jefferson.  And his fellow Republicans (the forerunner to the Democrat party, not the Republican Party of today whose first president was Abraham Lincoln).

Thomas Jefferson loved his wife and hated being apart from her.  The last place he wanted to be in 1775/1776 was at the Continental Congress in Philadelphia.  A lonely year spent a very long way from his wife.  Who was sickly.  And died in 1782.  Jefferson was at her bedside when she passed.  And he was devastated.  He had promised her he would never remarry.  And he never did.  He later accepted the post as United States Minister to France.  A much greater distance from Virginia.  Which is probably the first time he wanted to be far away from his beloved Monticello.  To escape the desolation of life without his wife.

The Founding Fathers served Reluctantly and didn’t leave Office Richer than when they entered Office

Hamilton and Jefferson hated each other.  They vehemently disagreed with each other’s vision for the United States.  When Jefferson got wind of the Hamilton affair he pounced on it.  Well, not so much him.  But the Republican Party which he was the de facto head of.  And a guy by the name of James Callender.  A pamphleteer and journalist.  And all around scandalmonger.  He made the Hamilton affair public for the Jefferson Republicans.  Who, being men of the Enlightenment, would not sink to such a low level.  But Callender would.  And did.  Who Jefferson helped with some financial support.  But Callender ended up in jail for sedition.  And when he got out he wanted Jefferson to make him post master general of Virginia in return for services rendered.  Jefferson refused.  Then Callender turned on Jefferson.  Revealing that it was him that was bankrolling his journalistic scandal mongering.  And that he fathered children with his slave Sally Hemings.

George Washington was the commanding general of the Continental Army from 1775 until 1783.  And he spent most of that time with his army in the field.  Away from his beloved Mount Vernon.  Just after he returned to civilian life came the Philadelphia Convention.  And a new nation.  The first president of that new nation?  Much to his displeasure it was him.  George Washington.  Who was the only one people were willing to give the powers of the new federal government to.  And after sacrificing so much he did not want to see it all be for nothing.  So he served one term as president.  Then another.  In New York.  A long way from Virginia.  And pretty much hated every minute of it.  Especially the bickering between his ‘children’.  Alexander Hamilton and Thomas Jefferson.  He was never happier than when he left office in 1797.  Sadly, he lived just shy of three years in retirement.

The Founding Fathers hated being in office.  They hated being away from home.  And the long travel time to and from home.  Which meant when they were serving in office they did not see their family and friends.  Unlike today.  Where modern transportation allows career politicians to enjoy the graft in Washington.  While breaking it up with numerous vacations back home.  Without having to endure two weeks of bouncy rides with hemorrhoids.  Or riding horseback in blowing snow.  Being a career politician today is like being part of an aristocracy.  Where you travel first class.  And live first class.  Unlike the Spartan loneliness at the Founding.  And the animus.  Washington’s, Jefferson’s, Madison’s and Hamilton’s lives all got worse from serving.  Washington was cheated out of a long retirement he more than earned.  Jefferson suffered bitter loneliness after losing his wife and probably did turn to the comfort of a slave.  (Sally Hemings had accompanied him to Paris to care for his daughter.  And later was a house servant.  Though he didn’t legally free her and her children from slavery they did live their lives out as free people after he died.  Which was probably a compromise by Jefferson to reconcile his feelings for her while protecting his historical legacy).  Something that blemishes his reputation to this day.  John Adams and Thomas Jefferson went from practically best friends to bitter enemies before they left Washington (though they rekindled their friendship later in retirement).  James Madison was the father of the Constitution and the Bill of Rights.  Believed in a strong federal government and wrote the Federalist Papers with Alexander Hamilton to help ratify the Constitution.  Then he switch sides.  And sided with Thomas Jefferson and fought for limited government.  Then he was president during the War of 1812 and believed in a strong federal government again after struggling through that war with a weak government.  Madison spent his later years rewriting letters and correspondence.  Making large revisions to his historical legacy.  While Alexander Hamilton’s stand on principle ultimately led to his death in a duel with Aaron Burr.

Washington, Jefferson and Madison all returned home after serving as president poorer than when they left for Washington.  That just doesn’t happen today.  Today once you get elected to a federal office in Washington you return home a millionaire.  Because being a professional politician today pays very well.  Which is why there is less standing on principle in Washington and more doing what it takes to remain in power.  Such as lying to the American people.  “If you like your health insurance and your doctor you can keep your health insurance and doctor.”  The Founding Fathers served reluctantly.  And their lives were worse for serving.  But the country was far better off because they did.  And that’s something else that just doesn’t happen today.

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Funding Gaps and Government Shutdowns

Posted by PITHOCRATES - October 15th, 2013

History 101

The Constitution prevented the Executive from Ruling Arbitrarily and becoming Judge, Jury and Executioner

There have been funding gaps.  And there have been government shutdowns.  But not always both.  For once upon a time the executive branch stayed open for business even when the House of Representatives did not approve their bills for payment.  But that all changed in 1980 thanks to Jimmy Carter’s attorney general.  Benjamin Civiletti.

Civiletti wrote two opinions as attorney general changing the way government spends money.  The first said the executive can’t spend any money without the House of Representatives’ approval.  A strict interpretation of the U.S. Constitution.  His second opinion softened the first.  Giving the executive power to spend money the House of Representatives doesn’t approve of when necessary to protect life and property.  Such as funding the military.  And so grew the delineation between essential and nonessential spending.  Or what some would say essential spending and pork.

The Founding Fathers saw the damage absolute monarchies could do.  Even a constitutional monarchy with too much power.  So they separated powers.  They created three branches of government.  The executive, the legislative and the judiciary.  One branch to write the law (the legislature).  One branch to enforce the law (the executive).  And one branch to interpret questions in the law (the judiciary).  Thus preventing the executive from ruling arbitrarily and becoming judge, jury and executioner.  Like a king.

The Founding Fathers gave the Power of the Purse to the House to rein in Executive Spending

The Founding Fathers took the separation of powers further.  The House of Representatives was the people’s house.  Where the people voted in their representatives by popular vote.  But to keep a check on federal power the Senate was the states’ house (since changed by constitutional amendment, thus greatly increasing the power of the federal government over the states).  Each state in the union had an equal voice.  Thus requiring not only a majority of the people it also required a majority of the states to pass federal law.  To keep the larger urban populations from dictating policy to the lesser populated rural areas.

The Founding Fathers took the separation of powers even further.  Giving the power of the purse to the House of Representatives.  So the executive couldn’t wage costly wars.  Or expand bloated bureaucracies to reward campaign donors with patronage.  Or expand a welfare state to buy votes.  Especially since Alexander Hamilton opened Pandora’s Box with his interpretation of the necessary and proper clause.  Which expanded the scope of the federal government to include whatever it thought was necessary and proper.  Giving rise to the progressive/liberal state.  Something that would have horrified Alexander Hamilton if he were alive today to see the behemoth the federal government became.  And had he known then what would become of the federal government today he would have been a Jeffersonian.  Jefferson and Hamilton would probably still have hated each other but they would have agreed on keeping limited government limited.

Civiletti understood that the Founding Fathers meant to rein in the spending powers of the executive branch.  To meet the intent of the separation of powers they felt was essential for representative government.  A government of the people, by the people and for the people.  As Abraham Lincoln so eloquently said in the Gettysburg Address some 76 years later.  Hence his first opinion.  Which he softened with his second when it hurt his boss and the Democrat cause.  For Civiletti was a Democrat.

The Democrats want to Break the Republican Opposition and Govern Against the Intent of the Founding Fathers

Before Civiletti’s opinions there was little urgency to settle funding gaps between what the executive branch wanted and what the House would approve.  So at the end of a fiscal year the executive often continued to operate without spending authority.  Letting the durations of these funding gaps last for a week or more.  With no interruption of government services.  But after Civiletti’s opinions the government shut down nonessential services.  Which did speed up the closing of the funding gap.  For when the funding gap included a government shutdown resolving the funding gap went from a week or more to a few days.

Funding Gaps and Government Shutdowns

To date there have been 18 funding gaps that went unresolved into the new fiscal year.  One of which is still ongoing.  In the table you can see how much quicker the House and the executive branch resolved their differences with the threat of a government shutdown.  The exception to that being the longest shutdown during the Clinton administration.  Which ultimately led the way to welfare reform.  Which greatly dampened President Clinton’s costly liberal agenda.  And was the law of the land until President Obama used sweeping powers he does not have to roll back some of that legislation.

President Obama and the Democrats have called the House Republicans about every derogatory name in the book for dare trying to enforce the Founding Fathers’ separation of powers.  Saying that never before has a radical fringe held a gun to the head of the executive, took hostages, demanded ransom, etc.  But that’s not true.  Of the 18 funding gaps where the House of Representatives did not give the president all the money he wanted that president was a Republican 55.6% of the time.  So Republican presidents got their way fewer times than Democrat presidents.  And as far as hostage takers, the Democrats held the power of the purse 15 of those 18 funding gaps/shutdowns.  Or 83.3%.  So the president and the Democrats aren’t telling the truth when it comes to the historical record.  Who seem to be more interested in swinging public opinion to their side.  So they can break the Republican opposition.  And govern against the intent of the Founding Fathers.

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FT172: “Damn the truth, promises and the Constitution,” said the politician. “I’m trying to get reelected.” —Old Pithy

Posted by PITHOCRATES - May 31st, 2013

Fundamental Truth

The People ratified the Constitution only because George Washington would be the First President

George Washington did not want to be president.  After winning the American Revolutionary War his place in history was set.  If the first government following the Constitutional Convention failed he didn’t want history to remember him for that.  Also, Washington was an old man.  Most Washington men were already dead at his age.  Something he was very conscious of.  And he wanted to live out his remaining days, however few he had, at Mount Vernon.  With Martha.  But America’s Cincinnatus would, reluctantly, answer the call of duty again.

The new Constitution was not very popular.  The old patriots of 1776 hated it.  With a passion.  While Washington, Alexander Hamilton and others who served in the Continental Army were generally for it.  Because they saw how the weak Continental Congress had almost lost the war.  Starving the Continental Army of the supplies they needed.  Unable even to provide it with shoes and clothing during the long cold winters at Valley Forge and Morristown.  And then there was the inflation.  Worthless Continental paper dollars that forced the Army to take what they needed to survive.  Giving the people they took from IOUs for the Continental Congress to honor later.

With the British defeated the Americans lost the common enemy that held the states together.  And they were soon back to looking after their own interests.  Charging tariffs to other states.  Even sending militias to fight over disputed land.  The nation was falling apart before it even became a nation.  The Philadelphia Convention addressed these problems.  And over a long, hot, humid and horsefly invested convention they wrote a new Constitution.  Few loved it.  But understood that it was probably the best they would ever get.  Ratifying it was another brutal battle.  And all throughout this process people reluctantly got on board.  Basically because of one thing.  The first president would be someone that all the people could trust with such great powers.  The man who gave up power when he could have been king.  George Washington.  So Cincinnatus laid down his plow once more.  And went to serve his nation.  Again.

The most Important Precedent Washington set was not Exceeding the Limits of the Constitution

This is how it used to be.  When our politicians were men of the enlightenment.  Disinterested men who went out of their way NOT to profit from the offices they held.  Men who would rather have been back home.  But reluctantly served.  Because the nation needed the best leaders during that formidable time.  That’s why Washington served a second term.  Not because he wanted to.  But if he didn’t Thomas Jefferson and Alexander Hamilton would have paralyzed the government with their constant fighting and seething hatred of each other.  So Washington stayed on.  Father to these children that couldn’t get along.  And father to a nation.

Washington was never happier than when he left office.  This man who could have been king.  Sacrificing all of his wants and desires.  And putting the nation first.  This old man that was cheating death.  Living beyond his years.  Who was used to giving orders in the army and having subordinates dutifully following them.  He hated the political process.  The deal making.  The special interests.  Those things modern politicians live for.  Because it is the pathway to wealth and power.  Which is why people serve today.  Who do not understand the meaning of selfless disinterest.  For they’re in it for number one.  And when they leave office they want to have more wealth than they know what to do with it.

Whereas Washington kept true to the Constitution.  And didn’t make arguments about it being a living document.  Or questioned the intent of the Founding Fathers.  For he was one of them.  He was there in Philadelphia in 1787.  He sat in the chair with that sun on it.  The one Benjamin Franklin studied for so long while sitting in that stuffy hall.  Wondering if the sun was rising.  Or setting.  After they signed the Constitution Franklin was certain the sun was rising for the new nation.  A nation of laws.  Where no man was above the law.  And the supreme law of the land was there in the Constitution.  Washington was the first president.  Setting the precedent for all that would follow.  And the most important precedent was not exceeding the limits of the Constitution.  For he knew a strong central government was necessary for the nation to have any hopes of surviving.  But he feared that once anyone exceeded the limits of the Constitution the whole experiment in self-government would come crashing down.

Life is so Good in an Aristocracy that Politicians will do Anything it takes to Win Reelection

What Thomas Jefferson feared most was consolidation.  Fears of a strong central government turning independent states into federal districts of the new government.  With growing powers to administer these lands from afar.  Turning the people living on these lands once again into subjects of a distant ruling power.  Who are there to serve.  To be obedient.  And revere this distant power.  Giving the duly elected president king-like powers.  Who would further consolidate his power.  This was Jefferson’s fear.  A fear Alexander Hamilton did not share.  Because he assumed all men in the government would be disinterested men of the enlightenment.  Like the Founding Fathers were.  But Jefferson knew you could not trust men to refrain from using power given to them.  So it was best not to give them that power in the first place.

Today you can see all of Jefferson’s fears come to pass.  A federal government larger and more powerful than even Alexander Hamilton could have imagined.  And a new fourth branch of government.  The IRS.  Powerful.  And fearsome.  Which appears to be helping the current administration to suppress the political opposition.  By harassing anyone espousing Jeffersonian principles.  Limited government.  States’ rights.  Constitutional limits.  Etc.  Which are also Tea Party principles.  That set of principles that launched a great grassroots movement that helped the Republicans win back the House of Representatives in 2010.  Something the Democrats were very conscious of.  And have since pilloried the Tea Party with every invective under the sun.  To delegitimize the Tea Party.  To prevent another 2010 from happening again.

President Obama is the most liberal president to ever occupy the White House.  And he won reelection.  Which isn’t easy for a liberal to do on a national stage.  Because only about 21% of the people call themselves liberal.  While 35% call themselves moderate.  And 40% call themselves conservative (see Conservatives Remain the Largest Ideological Group in U.S. posted 1/12/2012 on Gallup).  So liberals are in the minority.  Yet they hold majority power.  Which begs the question.  How do they win elections when the majority opposes their ideology?   Well, you don’t do it by acting like George Washington.  You know, with integrity.  But, instead, with rascality.  You don’t exactly tell the truth.  You make a lot of promises.  Even if you have no intention of keeping them.  And you use the awesome power of your office to attack your political enemies.  For it’s a different mindset today.  Whereas the Founding Fathers were trying to destroy an aristocracy today’s politicians are trying to build and maintain one.   And life is so good in an aristocracy that once you get in you never want to leave.  Which is why politicians will do anything it takes to win reelection.  Anything.  And if they were honest you’d hear them say so.  “Damn the truth, promises and the Constitution.  I’m trying to get reelected.”  But they’re not honest.  So you will never hear them say this.  You’ll just have to see it in their deeds.  And how unlike the Founding Fathers they are.

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The First Bank of the United States, the Second Bank of the United States and the Federal Reserve System

Posted by PITHOCRATES - April 2nd, 2013

History 101

Merchants raise their Prices when the Monetary Authority depreciates the Currency

What is inflation?  A depreciation of the currency.  By adding more money into the money supply each piece of currency becomes less valuable.  Let’s assume our currency is whiskey.  In bottles.  Whiskey has value because people are willing to pay for it.  And because we are willing to pay for it we are willing to accept it as legal tender.  Because we can always trade it to others.  Who can drink it.  Or they can trade it with others.

Now let’s say the monetary authority wants to stimulate economic activity.  Which they try to do by expanding the money supply.  So there is more money available to borrow.  And because there is more money available to borrow interest rates are lower.  Hence making it easy for people to borrow money.  But the monetary authority doesn’t want to make more whiskey.  Because that is costly to do.  Instead, they choose an easier way of expanding the money supply.  By watering down the bottles of whiskey.

Now pretend you are a merchant.  And people are coming in with the new watered-down whiskey.  What do you do?  You know the whiskey is watered down.  And that if you go and try to resell it you’re not going to get what you once did.  For people typically drink whiskey for that happy feeling of being drunk.  But with this water-downed whiskey it will take more drinks than it used to take to get drunk.  So what do you as a merchant do when the money is worth less?  You raise your prices.  For it will take more bottles of lesser-valued whiskey to equal the purchasing power of full-valued whiskey.   And if they water down that whiskey too much?  You just won’t accept it as legal tender.  Because it will be little different from water.  And you can get that for free from any well or creek.  Yes, water is necessary to sustain life.  But no one will pay ‘whiskey’ prices for it when they can drink it from a well or a creek for free.

It was while in the Continental Army that Alexander Hamilton began thinking about a Central Bank

During the American Revolutionary War we had a very weak central government.  The Continental Congress.  Which had no taxing authority.  Which posed a problem in fighting the Revolutionary War.  Because wars are expensive.  You need to buy arms and supplies for your army.  You have to feed your army.  And you have to pay your army.  The Continental Congress paid for the Revolution by asking states to contribute to the cause.  Those that did never gave as much as the Congress asked for.  They got a lot of money from France.  As we were fighting their long-time enemy.  And we borrowed some money from other European nations.  But it wasn’t enough.  So they turned to printing paper money.

This unleashed a brutal inflation.  Because everyone was printing money.  The central government.  And the states.  Prices soared.  Merchants didn’t want to accept it as legal tender.  Preferring specie instead.  Because you can’t print gold and silver.  So you can’t depreciate specie like you can paper money.  All of this just made life in the Continental Army worse.  For they were hungry, half-naked and unpaid.  And frustrating for men like Alexander Hamilton.  Who served on General Washington’s staff.  Hamilton, and many other officers in the Continental Army, saw how the weakness of the central government almost lost the war for them.

It was while in the army that Hamilton began thinking about a central bank.  But that’s all he did.  For there was not much support for a central government let alone a central bank.  That would change, though, after the Constitutional Convention of 1787 created the United States of America.  And America’s first president, George Washington, chose his old aide de camp as his treasury secretary.  Alexander Hamilton.  A capitalist who understood finance.

Despite the Carnage from the Subprime Mortgage Crisis the Fed is still Printing Money

At the time the new nation’s finances were in a mess.  Few could make any sense of them.  But Hamilton could.  He began by assuming the states’ war debts.  Added them to the national war debt.  Which he planned on paying off by issuing new debt.  That he planned on servicing with new excise taxes.  And he would use his bank to facilitate all of this.  The First Bank of the United States.  Which faced fierce opposition from Thomas Jefferson and James Madison.  Who opposed it for a couple of reasons.  For one they argued it wasn’t constitutional.  There was no central bank enumerated in the Constitution.  And the Tenth Amendment of the Constitution stated that any power not enumerated to the new federal government belonged to the states.  And that included banking.  A central bank would only further consolidate power in the new federal government.  By consolidating the money.  Transferring it from the local banks.  Which they feared would benefit the merchants, manufacturers and speculators in the north.  By making cheap money available for them to make money with money.  Which is the last thing people who believed America’s future was an agrarian one of yeoman farmers wanted to do.

They fought against the establishment of the bank.  But failed.  The bank got a 20 year charter.  Jefferson and Madison would later have a change of heart on a central bank.  For it helped Jefferson with the Louisiana Purchase.  And like it or not the country was changing.  It wasn’t going to be an agrarian one.  America’s future was an industrial one.  And that required credit.  Just as Alexander Hamilton thought.  So after the War of 1812, after the charter of the First Bank of the United States had expired, James Madison signed into law a 20-year charter for the Second Bank of the United States.  Which actually did some of the things Jefferson and Madison feared.  It concentrated a lot of money and power into a few hands. Allowing speculators easy access to cheap money.  Which they borrowed and invested.  Creating great asset bubbles.  And when they burst, great depressions.  Because of that paper money.  Which they printed so much of that it depreciated the dollar.  And caused asset prices to soar to artificial heights.

Andrew Jackson did not like the bank.  For he saw it creating a new noble class.  A select few were getting rich and powerful.  Something the Americans fought to get away from.  When the charter for the Second Bank of the United States was set to expire Congress renewed the charter.  Because of their friends at the bank.  And their friends who profited from the bank.  But when they sent it to Andrew Jackson for his signature he vetoed the bill.  And Congress could not override it.  Sensing some blowback from the bank Jackson directed that they transfer the government’s money out of the Second Bank of the United States.  And deposited it into some state banks.  The president of the bank, Nicholas Biddle, did not give up, though.  For he could hurt those state banks.  Such as calling in loans.  Which he did. Among other things.  To try and throw the country into a depression.  So he could blame it on the president’s anti-bank policies.  And get his charter renewed.  But it didn’t work.  And the Second Bank of the United States was no more.

National banks versus local banks.  Hard money (specie) versus paper money.  Nobility versus the common people.  They’ve argued the same arguments throughout the history of the United States.  But we never learn anything.  We never learn the ultimate price of too much easy money.  Even now.  For here we are.  Suffering through the worst recession since the Great Depression.  Because our current central bank, the Federal Reserve System, likes to print paper money.  And create asset bubbles.  Their last being the one that burst into the subprime mortgage crisis.  And despite the carnage from that they’re still printing money.  Money that the rich few are borrowing to invest in the stock market.  Speculators.  Who are making a lot of money.  Buying and selling assets.  Thanks to the central bank’s inflationary policies that keep increasing prices.

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FT157: “Now that the anti-establishment types are running government we are no longer to question authority but embrace it.” —Old Pithy

Posted by PITHOCRATES - February 15th, 2013

Fundamental Truth

The History of Oliver Cromwell’s New Model Army and the English Civil War were not that Distant

Benjamin Franklin said the first responsibility of every citizen is to question authority.  That was kind of America’s thing.  Giving the finger to the governing authority.  Figuratively.  And sometimes literally.  Starting with King George III.  One of our earliest flags said, “Don’t tread on me.”  This flag had a coiled rattle snake on it.  Franklin thought the rattle snake was a good symbol of the American people.  If the British left us alone this snake would cause no harm.  If you get too close this snake will warn you to back off by shaking its rattle.  If you don’t heed this warning and threaten this snake it will strike you with lethal force.

This problem with authority almost lost the Revolutionary War for us.  At first American soldiers didn’t like following orders.  For if they could rebel against their king they could just as easily rebel against a commanding officer.  George Washington stopped that.  But this mistrust of authority was systemic.  The state governments did not trust the Continental Congress.  That distant central power.  Anymore than they trusted that other distant central power.  The British monarchy.

So the Continental Congress was woefully underfunded throughout the Revolutionary War.  Finding it very difficult to supply the Continental Army.  Or pay her soldiers.  Something else the states didn’t trust.  A standing army.  For the history of Oliver Cromwell’s New Model Army and the English Civil War were not that distant.  Or the peace that followed.  Where that army helped keep the new government in power.  And unleashed great woe and suffering to the Catholics in Ireland and Scotland.

Kings don’t suffer Personal Attacks in the Newspapers like an Elected President Does

So the Americans stood up to that distant power.  And to her ministers in the American colonies.  Not afraid to speak truth to power.  To speak out about the abuses of King George in the colonies.  Which Thomas Jefferson summarized in the Declaration of Independence.  They spoke contemptuously of the ruling British authorities.  When they won their independence they transferred this contempt to the new federal government.  The states trusted the new central authority in the United States little more than they trusted the one on the far side of the Atlantic.  And many fought as passionately against it as they fought against King George.

Even those in the new central government didn’t trust each other.  Political parties formed.  Alexander Hamilton led the Federalists.  Who wanted a strong central government.  And Thomas Jefferson led the Republicans.  Who wanted a weak central government.  Keeping the power in the states.  Hamilton and Jefferson hated each other.  Despised each other.  Believed that the other was everything that was wrong in the new nation.  And they attacked each other viciously in the newspapers through their surrogates.  Which were extensions of these political parties.  So if you wanted fair and balanced news all you had to do was read at least two newspapers.  Weigh the vitriol and lies in each to arrive at the truth.  Which was somewhere in between.

And these papers were pretty nasty.  Even attacking the most beloved man in the country.  George Washington.  Calling him old and senile.  Secretly British.  A mere puppet controlled by that evil puppet master Alexander Hamilton.  George Washington could have been king with the blessings of the American people.  Instead he chose to keep the United States a republic.  And suffered horribly for it.  For kings don’t suffer the personal attacks in the newspapers like an elected president does.  This was representative government.  Where the people are sovereign.  And the president is a servant of the people.  Not the other way around.  Like in a monarchy.

You can call LBJ and George W. Bush Murderers but you can’t ask President Obama Questions he doesn’t want to Answer

People marveled at how George Washington stepped down from power after his second term as president.  Even King George said that if he did that he would be the greatest man in the world.  And he did.  Proving the American system.  But while others marveled about how he could give up power after so short a time in office Washington more likely marveled about how long he was able to stay in office.  For he hated the politics.  And the newspaper attacks.  He was anxious to step down.  He was giddy during the transfer of power.  Happy to be going home.  While poor John Adams had to deal with all the politics.  The newspaper attacks.  And the lies.

Contrast this to President Obama.  Who gets treated by the media with kid gloves.  Who don’t question him at all.  Or his administration.  It being more like a monarchy than a republic.  After 4 Americans died in Benghazi the president offered no explanation.  And the media did not pressure him for one.  When Congress finally got to question the Secretary of State, Hillary Clinton, they asked her who was responsible for the failure to provide for the security for our diplomats in Benghazi?  Who was responsible for not coming to their aid while they were under attack?  And who was responsible for the lie about it being a spontaneous uprising in response to a YouTube video?  She only yelled “what difference does it make?”  And that was that.  The media reported that the Republicans were mean to her.  And never pressed her for answers.  Or President Obama.

Even the people aren’t demanding answers.  Which is sad.  For once upon a time the people chanted, “Hey, hey, LBJ, how many kids did you kill today?”  Making the political pressure of the Vietnam War so unbearable that he refused to run for a second term.  But where is this outrage over President Obama’s use of drones to kill terrorists as well as the innocent civilians and children around them?  Or the targeting of American citizens without any due process?  We hear nothing from the people.  Or the media.  The same people and media who wanted to try the 9/11 mastermind, Khalid Sheikh Mohammed, in a U.S. court not far from Ground Zero during the Bush Administration.

Why the double standard?  Why was it okay to question authority in the Sixties and Seventies?  No matter who was in power.  But after that it was only permissible to question authority when Republicans were in power?  Why is it you can call LBJ and George W. Bush murderers but you can’t ask President Obama questions he doesn’t want to answer?  When Dr. Benjamin Carson spoke truth to power at the National Prayer Breakfast criticizing Obamacare and the president’s economic policies the Left attacked him for not showing deference to the president.  How dare he exercise free speech in a public setting they asked?  A far cry from “Hey, hey, LBJ, how many kids did you kill today?”  No.  This president we’re supposed to show deference to.  As if he was a king.  Why?  Apparently now that the anti-establishment types are running government we are no longer to question authority but embrace it.  So they can do whatever they want to do.  And change the country however they want to change it.  While that whole questioning authority thing was okay when they were on the outside looking in.  But now that they are on the inside looking out we need to question less and obey more.

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Hope, Fear and Lies

Posted by PITHOCRATES - December 13th, 2012

Politics 101

The Founding Fathers were Gentlemen of the Enlightenment with Sound Philosophical Beliefs

Politicians have to win elections.  They have to persuade and convince people to vote for them.  Once upon a time that meant vigorous debate where candidates explained why their way was the better way.  Going right back to the Founding.  Where Alexander Hamilton and Thomas Jefferson bitterly contested each other’s vision for the country.  And the debate often got dirty.  Such as when Hamilton’s political enemies exposed his extramarital affair with the con-woman Mrs. Reynolds who seduced Hamilton with the purpose of blackmailing him.  Who wanted to use this information to say he was involved in a bigger scheme with Mr. Reynolds in defrauding the federal government.

Treasury Secretary Hamilton met three gentlemen of the political opposition in private.  Admitting to his affair.  And proved beyond a shadow of doubt that all money paid to the blackmailers came from Hamilton’s private funds.  Not a penny came from the Treasury Department.  According to 18th century gentlemanly behavior the matter was closed.  The affair was a personal matter.  It would be imprudent to make it a public issue.  But upon Hamilton’s retirement a bitter political enemy leaked this information to a scandalmonger.  James Callender.  Who wrote a book exposing this private matter.  The History of the United States for the Year 1796.  Jefferson had helped to finance Callender.  And reveled in Hamilton’s scandal.  But when you lie down with dogs, you get up with fleas.  And Jefferson did.  For Callender published articles confirming rumors that Jefferson had fathered children with his slave Sally Hemings.

Politics then were just as dirty as they are today.  And often crossed the line.  But underneath all the scandals and mudslinging there were philosophical principles.  They did these things for principle.  For they feared the opposition and what their policies would do the fledgling nation.  There was political patronage and political corruption.  But above that was a battle of competing political ideology.  Waged by men well read in history.  Familiar with John Locke.  And Charles-Louis de Secondat, baron de La Brède et de Montesquieu.  Icons of the Enlightenment.  Whose philosophies can be found in the Declaration of Independence and the U.S. Constitution.  These Founding Fathers were rich propertied men.  Established in their careers.  Who had little left to prove.  These gentlemen of the Enlightenment did what they did not for money or political favor.  So they could live a more comfortable life.   They did these things out of principle.  Based on sound philosophical beliefs.

The Democrats try to Scare the Bejesus out of People to Get and Keep the Republicans out of Office

It’s not like that anymore.  Instead of rich successful people entering politics for selfless reasons people of no accomplishments enter politics to become rich and powerful.  Who have no principles.  Who will buy and sell anyone to remain in power.  Of course they don’t campaign by saying this.  Instead, their campaigns are based on hopes and fears.  And the telling a lot of lies.  With little principle.  Or sound philosophical beliefs.

In 2008 President Obama campaigned on hope and change.  To get away from the partisan politics of the past.  Democrats continue to peddle hope.  Health care for everyone.  College degrees for everyone.  High-paying green jobs and energy independence.  A return of manufacturing jobs.  Spending our way out of recession with Keynesian stimulus spending.  A bigger social safety net.  Talking to our enemies instead of going to war with them.  And making them like us by resolving all of our differences with diplomacy.  That we can have whatever we want.  If only we got the Republicans out of office.

While at the same time the Democrats try to scare the bejesus out of people if we don’t get and keep the Republicans out of office.  For the Republicans want to take away birth control and abortion from women.  And keep them from being independent and having careers.  The poor will remain poor.  The rich will get richer.  And the hungry will die.  Slavery will be reinstituted.  The Republicans will tax the middle class more so they can give tax breaks to rich corporations.  They will burden the nation with massive deficits with their tax cuts for the rich.  Global warming will continue unchecked.  Our drinking water will be polluted.  And our atmosphere will become poisonous to breathe.  All because Republicans put profit before people.

The Left tells a lot of Lies to Win Elections because all they have are Failed Keynesian Economic Policies

Republicans, on the other hand, peddle the hope that we can return to the prosperity of Ronald Reagan.  By cutting tax rates.  For throughout U.S. history whenever the government cut tax rates prosperity followed.  As well as flooded the treasury with tax dollars.  For contrary to the fear peddling of the Democrats cuts in tax rates have historically increased tax revenue.  And can again.  As Ronald Reagan campaigned in 1984, it can be Morning in America again.  We can be prouder, stronger and better.

While at the same time Republicans like to scare people with national security issues.  The Clinton administration handled terrorist attacks against America in the courts.  Which emboldened America’s enemies into an escalation of attacks resulting in 9/11.  The one in 2001.  Not the attack in 2012 on the U.S consulate in Benghazi.  While the Democrats believe our enemies hate us because George W. Bush made them hate us with his cowboy swaggering ways.  And that was the only reason.  Even though Bush had little time to swagger before the attacks on 9/11.  Those in 2001.  Not the ones in 2012.  The Republicans say our enemies hate us for who we are.  As we are too Christian.  And allow our women to have careers and use birth control and abortion.  Something our enemies won’t allow their women to have.

President Obama did not end partisan politics.  He lied about that.  For his administration has been perhaps the most partisan in U.S. history.  With no interest whatsoever in compromise.  He and the Democrats continue to lie about the Reagan tax cuts.  And the Bush tax cuts.  Blaming tax cuts for all our woes.  And our deficits.  Despite those tax cuts increasing tax revenue.  They lied about a war on women.  Having one of their cronies in the mainstream media create it by asking Mitt Romney if he wanted to take away women’s birth control.  And they continuously spread the lie that the rich aren’t paying their fair share in taxes.  When the top 10% of income earners pay about 70% of all federal income taxes.

So the Left tells a lot of lies to win elections.  Because that’s all they have.  They do not have a Morning in America they can talk about.  Just failed Keynesian economic policies.  Like the 4 years of Jimmy Carter.  The 4 years of President Obama.  And what may have been the 4 years of Bill Clinton had it not been for the Republicans taking control of Congress 2 years into his presidency.  Of course the Republicans can tell a lie, too.  The big one being their claim of being conservative like Ronald Reagan.  As they too often fall for the lies coming from the Left.  And appear more interested in living a comfortable life than sound philosophical beliefs.

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2012 Endorsements: Aaron Burr

Posted by PITHOCRATES - October 23rd, 2012

2012 Election

Hamilton knew that a Republican Government needed Men of Virtue for it to Survive

Lucius Quinctius Cincinnatus left his plough to defend the Roman Republic.  Became dictator.  Defeated the enemy.  Resigned the dictatorship.  And returned to his plough.    The epitome of a republican ruler.  Voluntarily giving up absolute power to preserve the republic.  America had its own Cincinnatus.  George Washington.  Lucius Sergius Catilina (Catiline) was basically the anti-Cincinnatus.  Whereas Cincinnatus was honorable, virtuous, principled and selfless Catiline was not.  Where Cincinnatus tried to save the Roman Republic Catiline tried to overthrow it.  America had its own Catiline.  Aaron Burr.

Burr was an unprincipled opportunist.  While George Washington approached politics by asking what was best for the country Aaron Burr asked what was best for Aaron Burr.  Washington loathed politics and tried to stay above it.  Whereas for Burr politics were the only good thing about governing.  Burr entered politics at the birth of political parties in the US.  As the tensions were building up between Hamilton’s Federalists and Jefferson’s Republicans.  Burr started out as a Federalist.  But chafed in a subordinate role to Hamilton.  The titular head of the Federalist Party.  So he left the Federalist Party and became a Republican.  He accepted an appointment from Republican New York governor George Clinton as attorney general.  New York had two Federalist senators in Congress.  And Hamilton wanted to keep those seats Federalist.  He tried to appeal to Burr’s principles to get him to return to the Federalist Party.  But Burr had no principles.  And when Governor Clinton backed him for Senator he stayed Republican.  And won one of those seats.

Being Senator was nice but Burr wanted to be governor of New York.  He tried to make a deal with the Federalists.  He knew they wanted to get rid of Republican Governor Clinton and replace him with a Federalist governor.  He wanted to be that Federalist governor.  But Hamilton was a lot like Washington.  He had principles.  And put the country first.  Hamilton knew that a republican government needed men of virtue for it to survive.  And Burr had no virtue.  So he was not interested in making any deals with Burr.

Alexander Hamilton called Aaron Burr the American Catiline

In the election of 1800 Thomas Jefferson needed New York.  And Burr had connections.  So Jefferson asked for his help.  And he delivered.  By changing the New York electors from Federalist to Republican.  Jefferson then added Burr to the Republican ticket in the 1800 election.  At that time the president was the candidate who won the most votes.  And the vice president was the candidate who won the second most votes.  Burr and Jefferson tied.  Instead of conceding the election to Jefferson (the whole point in enlisting Burr’s help was to get Jefferson elected president) he forced the House of Representatives to vote 36 times until the tie was finally broken.  Thus alienating Burr from Jefferson forever.  Knowing that Jefferson would drop him from the Republican ticket in the 1804 election he began talking to New York Federalists again.  Who wanted Burr to run for New York governor.  And he was more than willing to switch parties again as he was completely unprincipled and offered himself to the party that made it most worth his while.  It was at this time that Hamilton called Burr the American Catiline.

Also at this time there was a Federalist plot in New England.  Should Jefferson win reelection in 1804 there were plans for New England to secede from the union.  With Burr’s help New York would secede and join in a northern confederacy.  Hamilton knew of the plot.  And desperately wanted to stop it.  For it was the last thing he wanted was for the American union to dissolve.  He turned up his public attacks on Burr.  Which helped Burr lose the election in New York.  Attacks that Burr took exception to.  Challenging him to a duel to restore his honor besmirched by Hamilton’s attacks.  So on July11, 1804, Aaron Burr and Alexander Hamilton crossed the Hudson River to Weehawken, New Jersey.  And exchanged pistol shots at 10 paces.  Hamilton reportedly fired his shot harmlessly past Burr.  Not wishing to hurt him while at the same time exposing himself to danger so as not to besmirch his honor.  Burr’s shot, though, found Hamilton.  He died the following day.  Burr won the duel.  But he lost his reputation and his political future.

Burr then headed west.  Where he had planned to set himself up in an independent nation formed by parts of Mexico, Louisiana and Texas.  He may have tried to get Great Britain involved.  And he may have had plans of going to war with Spain.  The details are a little sketchy.  But he was up to something.  When President Jefferson learned of his activities he had Burr arrested and indicted for treason.  He was acquitted of treason at his trial.  But the trial destroyed whatever was left of his political career after killing Hamilton.

If Aaron Burr were Alive Today he would likely endorse the Democrat Candidates Barack Obama and Joe Biden

If Burr were alive today he would be in awe of what the federal government became.  Back in his days there were few federal jobs available.  But today?  He could live the life he always wanted.  And he wouldn’t even have to win an election.  All he would need to do is use his political connections to obtain a position in the federal bureaucracy.  A post for life.  And with an ever expanding federal government there would always be a post for life somewhere in that magnificent bureaucracy.  Where politics ruled.  Not principles.  Where government spending soars regardless of the consequences.  And class warfare creates a new aristocracy.  Not the top 10% earners who pay 70% of federal income taxes.  Or the bottom 50% who pay no federal income taxes.  No, the new aristocracy is the federal bureaucracy that sits on top of this great wealth transfer.  Like the nobility of old.  Only without the need of having a good last name.

Had Burr lived today he would have looked at the federal government and cried out, “Where have you been all my life?”  He would support anyone furthering this massive government expansion.  Especially those practitioners of class warfare.  The Democrat Party.  If Aaron Burr were alive today he would likely endorse the Democrat candidates Barack Obama and Joe Biden.

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2012 Endorsements: James Madison

Posted by PITHOCRATES - October 22nd, 2012

2012 Election

The Father of the Constitution nudged the Father of the Country out of Retirement

The Confederation Congress did not work as well as some had hoped.  Despite having won their independence from Great Britain there was still no feeling of national unity.  Sectional interests prevailed over national interests.  Greatly affecting the ability of the national government to function.  Negating the benefits of union.  And offering little respect for the young nation on the world stage.  The new nation simply was not taken seriously at home.  Or abroad.  Prompting a meeting of states delegates in Annapolis in 1786.  Twelve delegates from five states showed up.  The states just didn’t care enough.  The convention adjourned after only three days.  But not before Alexander Hamilton put a plan together for another convention in Philadelphia for the following year.

The states were happy with the way things were.  They did not want to give up any of their powers to a new central authority.  But the problem was that the states were fighting against each other.  Trying to protect their own economic interests and their own trade.  Some could extend this behavior out into the future.  And they did not like what they saw.  States with similar interests would form regional alliances.  And these alliances would ally themselves with some of the European powers who were also on the North American continent.  The northern states (having industry and commerce) would join together and ally with the industrial and commerce powerhouse Great Britain.  The agrarian southern states would join together and ally with Great Britain’s eternal enemy.  France.  And the western territories dependent on the Mississippi River to get their agricultural goods to marker would ally with the European power in control of the Mississippi River.  Spain.  Who were both eternal enemies of Great Britain.  And the centuries of warfare on the European continent would just extend to North America.  Some saw this as the American future if they didn’t unite and put the nation’s interests ahead of sectional interests.

The Constitutional Convention in Philadelphia in 1787 almost didn’t happen.  For there was as much interest in it as there was in the Annapolis Convention in 1786.  James Madison, the father of the Constitution, made the meeting in Philadelphia a reality.  By his persuasive efforts with his neighbor.  George Washington.  Father of our Country.  Then in retirement at Mount Vernon with no interest to reenter public life after resigning his commission following the Revolutionary War.  He could have been king then but declined the numerous offers to make him so.  Happy that they won their independence he just wanted to live out his years on his farm.  Like Lucius Quinctius Cincinnatus.  Who left his plough to become dictator of the Roman Republic.  To defend the Roman Republic.  He defeated the enemy.  Resigned his dictatorship.  And returned to his plough.  Earning a cherished place in our history books.  Something Washington had just done.  Only taking some 8 years instead of 16 days like Cincinnatus.  His place in history had come with a far greater price.  And he did not want to risk losing what he had earned after paying so dearly for it.  But Madison knew that it would take Washington’s presence to get the other states to send their delegates.  So Madison was persistent.   The Father of the Constitution nudged the Father of the Country out of retirement.  And made the retired general do the last thing he wanted to do.  Return to public life.  As he was already an old man who outlived the average lifespan of Washington men.

Madison didn’t believe a Bill of Rights would Stop a Majority from Imposing their Will on the Minority

It took four long, miserable months to produce the new constitution.  It was a hot and insufferable summer.  And they kept the windows of Independence Hall closed to block out the city noise.  And prevent anyone from hearing the debates.  So the delegates could speak freely.  And after those four long months the delegates signed the new document.  Not all of them.  Some hated it and refused to sign it or support it.  And would actively fight against it during the ratification process.  As they did not like to see so much power going to a new federal government.  Especially as there was no bill of rights included to help protect the people from this new government.  The document they produced was based on the Virginia Plan.  Which was drafted by James Madison.  Which is why we call him the Father of the Constitution.  So Virginia was instrumental in producing the new constitution.  And the delegates finally agreed to it because of another Virginian.  George Washington.  Making Virginian ratification of the new constitution conditional for other states to ratify it.  So all eyes were on Virginia.  For without Virginia all their efforts in Philadelphia would be for naught.  Because if Virginia did not join the union under the new Constitution that meant George Washington would be ineligible to be president.

Of course getting Virginia to ratify was another story.  Because George Washington and James Madison were not the only Virginians in politics.  There was also George Mason.  Who wrote the Virginia Declaration of Rights (1776).  Which Thomas Jefferson may have borrowed from when writing the Declaration of Independence.  And Mason also wrote the Virginia State Constitution (1776).  Mason opposed granting the new federal government so much power and refused to sign the Constitution in Philadelphia.  And then there was Patrick Henry.  Perhaps the greatest Patriot orator.  And of “Give me Liberty, or give me Death!” fame.  Which he shouted out during the Stamp Act (1765) debates.  He was also Virginia’s first governor under the new state constitution.  Mason and Henry were Patriots of the 1776 school.  The kind that hated distant central powers.  Whether they were in London.  Or in New York.  Mason wanted a bill of rights.  Henry, too.  As well as amendments transferring a lot of power from the federal government back to the states.  Or, better yet, no federal constitution at all.  Which Henry would work towards by leading a fierce ratification opposition.

Perhaps the greatest flaw of the new constitution as many saw was the lack of a bill of rights.  This was a contentious issue during the convention.  It was the reason why Mason refused to sign it.  As there was nothing to check the powers of the new government and protect the people’s liberties.  So why did they not include a bill of rights?  Because it was not necessary.  According to Madison.  Who fought against it.  Because the new federal government was a government of limited powers.  It wasn’t like the state governments.  The new federal government only did those things the states didn’t do.  Or shouldn’t do.  Like treat with other nations.  Provide a common defense.  Regulate interstate trade.  Things that expanded beyond a state’s borders.  And what powers it had were enumerated.  Limited.  It did not repeal individual rights protected by state constitutions.  And had no authority over those rights.  Whatever rights a person enjoyed in their state were untouchable by the new federal government.  Therefore, a bill of rights was not necessary.  Which actually protected rights greater than listing them.  For whatever rights they forgot to list the federal government would assume were fair to abuse.  Finally, Madison didn’t believe a bill of rights would stop a majority from imposing their will on the minority.  A tyranny of the majority.  Something he saw firsthand as a young man returning from college.  Where the state of Virginia harassed and imprisoned Baptist ministers for holding Baptist services in Anglican Virginia.  Something he didn’t forget.  Nor did the Baptists.

If James Madison were Alive Today he would Likely Endorse the Republican Candidates Mitt Romney and Paul Ryan

Patrick tried hard to prevent the ratification of the constitution in Virginia.  But failed.  When it came time for the Virginian legislature to elect their federal senators Henry campaigned hard against Madison and saw him defeated.  When it came to the federal House elections Henry drew the new Congressional districts that made Madison campaign in a district full of people that mostly disagreed with him.  Which it took a change of his position on adding a bill of rights to the Constitution to overcome.  His position gradually changed from opposed to being lukewarm to being a strong supporter.  In part due to some correspondence with Thomas Jefferson then serving in France.  And the Baptists’ concerns over rights of conscience.  Something Madison had longed believed in.  Believing religious liberty was essential to a free people.  As the Constitution stood there were no safeguards specifically against the oppression like that the Anglicans imposed on the Baptists earlier.  What the Baptists wanted was a bill of rights.

Madison promised, if elected, to introduce an amendment to the Constitution addressing their concerns.  In fact, a bill of rights would be the first Constitutional amendment.  And he would introduce it and fight for it until it was ratified.  Based on this promise the Baptists threw their support behind Madison.  Got him elected to the House of Representatives.  And Madison delivered on his promise.  Championing a bill of rights through Congress.  The Father of the Constitution also became the Father of the Bill of Rights.  And then it was a knockdown drag-out fight in the Virginian legislature to get the new Bill of Rights ratified.   Where the opposition to ratification was led by none other than Patrick Henry.  But he would lose that fight, too.  And the nation would have a federal government with limited, enumerated powers.  With individual liberties protected by a bill of rights.  Providing a federal government powerful enough to do the things it needed to do like treat with other nations, provide a common defense, regulate interstate trade, etc.  Those things that expanded beyond a state’s borders.  And in the following decade we would be prosperous because of it.

None of this could have happened without Virginia’s ratification of the Constitution.  Which opened the door for George Washington to be our first president.  And helped New York ratify the Constitution.  With the ratification in Virginia.  And the letter writing campaign in support of ratification.  Which appeared in newspapers.  Articles written by James Madison and Alexander Hamilton (mostly) and John Jay.  Now published as the Federalists Papers.  Thanks to the tireless efforts of Madison and Hamilton the nation had a new form of government.  But Madison and Hamilton would soon part ways once Hamilton was Secretary of the Treasury.  And took great liberties with the necessary and proper clause of the Constitution.  Expanding the power and scope of the federal government far beyond what Madison had ever envisioned.  Which moved Madison into closer company with George Mason and Patrick Henry.  Desperately trying to hold onto states’ rights and oppose the expansion of the federal government.  Like he would oppose the great overreach of the federal government today.  The transfer of power from the states to the federal government.  And the expansion of suffrage to include those who don’t own property or pay taxes.  Leading to mob rule at times.  Populism.  And a tyranny of the majority.

Madison suffered ill health most of his life.  Stomach disorders and dysentery.  Brought on by the pressures of public service.  If he were alive today he probably wouldn’t remain alive long.  Seeing what has happened to his Constitution would probably kill him.  If he had the chance to vote today he would vote for the party that championed limited government.  The party that would stop the growth of the federal government.  And reduce its size.  The party that governed for all people and not the will of the populist mob.  The party that did NOT govern through class warfare but through sound principles.  If James Madison were alive today he would likely endorse the Republican candidates Mitt Romney and Paul Ryan.

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2012 Endorsements: Alexander Hamilton

Posted by PITHOCRATES - October 18th, 2012

2012 Election

When Hamilton looked out Across the Vast North American Continent he saw Great Economic Opportunity

Alexander Hamilton was born in the British West Indies.  At the age of eleven he had to get a job.  As his father abandoned his family after losing all the family money.  Young Alexander worked at Cruger and Beckman’s.  a New York trading house.  A window onto the world.  And international trade.  Where young Alexander learned about the world.  And business.  He had a gift for numbers.  He was bright.  And driven.  Born in the British West Indies he was also something else.  A Founding Father without any state lineage.  With no provincial views.  During the prelude to American independence when other patriots talked about the states going their own way he was already thinking of an American union.  And only of an American union.

The British response to the Boston Tea Party was the Intolerable Acts.  Or the Coercive Acts in Britain.  Where the British put the hurt on Boston.  And Massachusetts.  To separate it and isolate it from the rest of the colonies.  Reverend Samuel Seabury took to the papers and argued against uniting the other colonies to support Massachusetts.  That the people should support their king.  And Parliament.  And not the spoiled, trouble-making people of Boston.  Hamilton took to the papers and argued in support of union.  And Boston.  Warning the people that this was just the beginning for Britain.  More taxes would certainly follow.  Hamilton warned the people to put away their sectional differences.  As this attack on one was an attack on all.  And that if they gave up on Boston it would only be a matter of time before other colonies met the same fate.

That was all well and fine during the warm months of summer.  But the American colonies were part of the British Empire.  Which was a mercantilist empire.  Whose colonies shipped raw materials to the mother country.  And the proceeds from those sales were used to buy manufactured goods made from those raw materials in the mother country.  Making the colonists dependent on Britain for their clothing.  The lack of which would make a very cold and miserable winter.  Which led a lot of people to agree with Reverend Samuel Seabury.  But not Hamilton.  For he looked out across the American colonies and saw something else.  Economic independence.  The South had cotton.  The North could raise sheep for wool.  And they could build factories in the cities to make cloth and clothing.  Staffed by skilled immigrants from European factories.  This is what Hamilton saw when he looked out across the vast North American continent.  Great economic opportunity.  Made possible by an American union.

Hamilton spent the Winter Seasons at Valley Forge and Morristown Reading and Studying Economics and Public Finance

When the Revolutionary War came Hamilton joined the Continental Army.  Fought bravely.  Then ended up as General Washington’s aide-de-camp.  Serving in Washington’s inner circle he knew what the commanding general knew.  And he knew the sorry state of the army.  Half-naked, hungry and unpaid.  While some civilians were living the life of Riley.  Making a fortune off of hording commodities and selling them at high prices.  Which they could do with impunity as the Continental Congress was powerless to stop them.  As it was at the mercy of the states.  The national congress was broke and had little legal authority.  Which let the speculators run roughshod over it.  Leaving the people sacrificing the most for independence half-naked, hungry and unpaid.  Diminishing the fighting ability of the army.  Which greatly increased the risk of defeat.

Hamilton learned an important lesson.  The stronger the national government was, and the richer it was, the easier it was to wage war.  And the easier it was NOT to be defeated in war.  The problem here was that the national government was too weak.  While the state governments were too strong.  Which was fine for the people living normal lives in their states.  But not the soldiers in the field fighting for the nation.  Making things worse was inflation.  The Continental Congress was printing money.  As were the states.  And the more they printed the more they depreciated it.  Which led to even higher prices.  More profits for the speculators.  And even more hardship for the army.  Which had to at times take things from the local people in exchange for IOUs.  Making these people hate the army.  And the army hate the people.  As they were the ones risking life and limb for what was to them an ungrateful people.

Hamilton spent the winter seasons at Valley Forge and Morristown reading and studying economics and public finance.  And set out to solve the inflation problem.  What he learned was that a lot of people were benefiting by the rampant inflation.  Debtors loved it.  For the greater the inflation was the easier it was to repay loans in those depreciated dollars.  Especially the farmers.  They sold their produce at ever higher prices.  Borrowed money to buy land (and repaid those loans in depreciated dollars).  While escaping much of the ravages of inflation themselves.  Because they were farmers.  And were self-sufficient.  Eating what they grew.  Even making their own clothes.  For some inflation was a way to get rich quick at the detriment of others.  To help dissuade such activity Hamilton suggested high taxes in kind (if a farm grew wheat that they turned into flour they would pay a portion of their flour to the government as a tax) on those benefitting from inflation who where destroying the confidence in the dollar.

If Hamilton were Alive Today he would likely Endorse the Republican Candidates Mitt Romney and Paul Ryan

Hamilton also suggested a plan for a national bank.  To help restore the credit of the United States.  And to provide a source of credit for the national government.  The bank would be owned half by the government and half by rich investors.  By letting the rich investors make money on the bank it would, of course, encourage them to invest in the bank.  And provide capital the government could borrow.  Hamilton believed in bringing the rich people closer to the government.  So the government had access to their money.  Both would win in such a partnership.  And both would have a vested interest in seeing the government succeed.  The Continental Congress used some of Hamilton’s ideas.  But not enough to bring his vision to life.  He would get another chance, though.  When he became America’s first Secretary of the Treasury.

At the end of the Revolutionary War the United State’s finances were in a mess.  State governments and the national government owed money.  As they used that money to prosecute the war Hamilton believed the national government should assume the states’ debts and roll in into the national debt.  And, more importantly, the new national debt would help strengthen the union.  By binding the states to the national government.  These actions also helped to restore the nation’s credit.  Allowing it to borrow money to repay old debts.  As well as finance new spending.  Hamilton also got his bank.  And he produced a report on manufacturers.  A plan to use government funds to help launch American industry.  So they could catch up to Great Britain.  And even surpass the former mother country.

Hamilton pushed for these things because he wanted to use the power of government to make America strong and fiercely independent in the world of nations.  With an economic plan that would make the nation wealthy.  And allowing it to afford a military that equaled or surpassed Great Britain.  He did not want to make America wealthy to implement a massive welfare state.  His idea of partnering government with business was to make an American Empire modeled on the British Empire.  Making it a rich military superpower.  Able to project force.  Maintaining peace through strength.  Much like the British did with their Pax Britannica that he didn’t live to see.  And to protect what it had from anyone trying to take it away from them.  So based on this who would he endorse in the 2012 election?  The party that had business-friendly policies to encourage economic growth.  The party that was more anti-inflation.  The party that would best exploit the nation’s resources.  And the party that favored a strong military.  Which is NOT the Democrat Party.  No, if Alexander Hamilton were alive today he would likely endorse the Republican candidates Mitt Romney and Paul Ryan.

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