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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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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Alexander Hamilton, Aaron Burr, Governor Clinton, Livingstons, Schuylers, James Duane, Rufus King and the Hamilton-Burr Feud

Posted by PITHOCRATES - October 4th, 2012

Politics 101

Alexander Hamilton was an Illegitimate Child whose Father abandoned his Family

America is the land of opportunity.  Where anyone can achieve great success.  In America you can be self-made.  You don’t need a good last name to get you places.  We have no nobility here.  No aristocracy.  Here, everyone has an equal chance.  If you have drive and ambition and talent and patience the sky is the limit.  You can go from rags to riches if you have the desire and refuse to give up.  You may fail.  And a lot of people do.  But you get to try.  Something you just can’t do in many other parts of the world.

That said it often helped to have a good last name in America.  Back in the 18th century people still married to improve their social standing, political power and wealth.  That’s why powerful families often held most of the power in cities and states.  Especially around the Founding.  And if you crossed some of these families there was going to be some payback.  So people were careful to cultivate good relationships with people that ‘mattered’.  Especially in the military.  Where the gentlemen of the finest families filled the officer corps.  Including a young Alexander Hamilton.

Hamilton’s father, James, had a good last name but he long destroyed it before Alexander could profit from it.  Worse, Alexander Hamilton was an illegitimate child.  A child of adultery.  Fathered by James.  Then James lost the family money.  And abandoned his family.  Forcing eleven year old Alexander to get a job as a clerk at Cruger and Beckman, a New York trading house on the Caribbean island of St. Croix.  Where he advanced to bookkeeper.  Then to manager.  Helping him to master the skills of business and finance.  As he grew into a young man he was smart, dashing, talented and ambitious.  He had everything to succeed in the finest social circles.  Except a good last name.

Everything Hamilton was Denied by his Birth Burr was Given

That changed in the United States.  During the American Revolution.  After leaving St. Croix he arrived in New York.  And fell into the good graces of the Livingston family of New York.  A very good last name.  One of the best in the state.  Having been accepted in this circle of aristocracy made Hamilton a true gentleman.  Which qualified him for the most esteemed duty in the Revolutionary War.  Aide-de-camp to General George Washington.  Confidant and advisor to the Commander in Chief.  A very restricted inner circle.  Restricted to only the best of the best of last names.

Included in that inner circle was another ambitious young officer.  Aaron Burr.  Who was very similar to Hamilton in many ways.  But very different in one way.  Burr had a very good last name.  Everything Hamilton was denied by his birth Burr was given.  And there was one more difference.  Though both were ambitious Hamilton was driven by principle while Burr was driven by pride.  For Burr everything was about what was best for Burr.  While Hamilton put the country first.  Even though he was just as ambitious as Burr.

Burr would leave his post as aide-de-camp following a clandestine love affair.  It was the kind of thing General Washington would frown upon.  But there was another reason for leaving than avoiding a potential falling out with the general.  Burr just didn’t like Washington.  Who was very dignified, proper and reserved.  Which Burr found boring.  He was a dashing figure.  He was an officer who sought glory.  And the ladies.  Something he took great pride in.  His reputation as a lover.

When General Schuyler came up for Reelection the Livingstons wanted their Revenge and backed Burr

Fast forward to the Washington administration.  And the Hamilton and Jefferson feud.  The war between the Federalists and the Republicans.  Hamilton and his Federalists were losing their hold of power to Jefferson’s Republicans.  Jefferson had done a good job in his attacks against Hamilton and caused some defections in the Federalist Party.  The farmers in the South and out west did not like Hamilton’s designs for the country.  Based more on commerce and manufacturing.  And less on farming.  Worse, it was commerce and manufacturing supported by banking.  Even Federalist support was waning in his own state.  New York.  Which Hamilton needed to keep control of the Congress.  He had to have Federalist win the upcoming elections in New York so they would select Federalist Senators to the U.S. Senate.  There was only one problem.  Governor Clinton.

Clinton fought against the ratification of the U.S. Constitution.  But he lost.  And his power was on the wane.  He had the support of the farmers.  But not the Livingstons or the Schuylers.  The two most powerful families in the New York aristocracy.  Who were aligned against him.  And they were Federalists.  While he was a Republican.  Hamilton gave the Federalists their campaign slogan for the upcoming election.  Unanimity and Exertion.  To emphasize the importance of being unified.  So the Livingstons and the Schuylers unified.  And it worked.  The Federalists won both the state assembly and the state senate.  Which meant the Federalists would be choosing the state’s senators to Congress (prior to the 17th Amendment a state’s legislature chose their senators).  And the Livingstons and the Schuylers having done their part they were ready to have one of their own fill those two seats.  The Livingstons wanted James Duane.  The Schuylers wanted General Schuyler.  There was only one problem.  Hamilton.  Who wanted Rufus King to be one of those senators.

Hamilton had connections to both families.  The Livingstons helped him start his career.  And General Schuyler was his father-in-law.  Yet King was a loyal Hamiltonian.  And that’s who Hamilton wanted.  He even got his father-in-law to support Rufus King over James Duane.  Which did not go over well with the Livingstons.  So much for unity.  The Livingstons not only broke with the Schuylers.  They joined forces with Governor Clinton.  Greatly bolstering his power.  It was a whole new game in New York.  Tilting the power from the Federalist to the Republican.  Then another player entered the picture.  Aaron Burr.  Who was a lawyer like Hamilton.  Even got along well with him.  Until the ratification of the Constitution.  And Burr took an interest in politics.  Becoming a Federalist.  Along with Hamilton.  But always subordinate to Hamilton within the party.  Something his ego just couldn’t have.  So he switched parties.  And accepted a Clinton appointment as attorney general.  Hamilton tried to win him back to the Federalists by appealing to his principles.  But Burr had no principles.  He was strictly out for himself.  So he stuck by Clinton for the time being.  Because he had more to offer at the time.  Like a U.S. Senate seat.

When General Schuyler came up for reelection the Livingstons wanted their revenge.  So they joined with the Clintonians and backed Burr for Schuler’s seat.  Burr won.  A humiliating defeat for Hamilton and the Schuylers.  Trying not to burn his bridges back to the Federalist Party Burr said he would challenge Clinton one day for the governorship.  If they’d support him.  Which he thought they would.  For they wanted to throw Clinton out of office.  But Hamilton was a man of principle.  Burr was not.  Hamilton would provide no Federalist support for Burr.  So Burr gave up on that idea.  And set his sights on the vice presidency of the United States.  As unprincipled as Burr was Hamilton could not let that happen.  And actively opposed Burr.  Thus beginning the great feud that would end on the heights of Weehawken in New Jersey.  The favorite dueling ground for New Yorkers.

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Hamilton, Jefferson, Republicans, Federalists, Money & Power, Corruption, British, French, Neutral Shipping and Letters of Marque

Posted by PITHOCRATES - September 27th, 2012

Politics 101

Hamilton trusted Men of Integrity to Govern Justly while Jefferson believed Money and Power would Corrupt Anyone

Nasty politics began back in the Washington administration.  With the seething hatred between Alexander Hamilton and Thomas Jefferson.  These American greats had two different visions for America.  Based on their background.  Hamilton’s from his experience in the Continental Army and his business experience.  Jefferson’s from his books.  As different as their views for America were, and despite their hatred for each other, they both loved their country.  And wanted what was best for their country.  While absolutely sure that the other had nefarious plans for its ruin.

Both were students of the Enlightenment.  Both believed in the natural, God-given rights of the people.  And both believed vehemently in the rule of law.  In fact, both were lawyers.  But Hamilton was part of the Continental Army when its troops were barefoot, half-naked and starving.  Which were barefoot, half-naked and starving because of a weak Continental Congress that could not provide for them.  Because they were weak, impotent and could not levy taxes.  All they could do was ask the states to give them money.  The states promised little.  And delivered even less.  Threatening the American Revolution itself.

Jefferson, on the other hand, saw that history was replete with examples of corruption and oppression whenever financial centers and the seat of power got too close.  Hamilton may have seen this.  But what he was most conscious of was the British Empire.  The greatest empire in the world.  Which became the greatest empire in the world by bringing the financial centers and the seat of power together.  Which is what Hamilton wanted to do.  Trusting in the integrity and moral character of gentlemen of the Enlightenment.  Who would rule with selfless indifference.  Principled men with strong Judeo-Christian values.  These were the men that would rule America.  Men like the Founding Fathers.  Who they could trust with money and power.  Who America should trust with money and power.  To make an American Empire to surpass the British Empire.  This is what Hamilton wanted.  While Jefferson believed that money and power would corrupt anyone.  If not in their generation then surely in the generations to follow.  And the best way to prevent this was by giving government as little money and power as possible.

An Outbreak of Yellow Fever in Philadelphia nearly settled the Quarrel between Hamilton and Jefferson

So Jefferson opposed Hamilton at every opportunity.  Such as the Bank of the United States.  And Hamilton’s funding system.  Making matters worse was that Hamilton’s Treasury Department was the largest department in the federal government.  While Jefferson’s State Department was one of the smallest.  So Jefferson tried to transfer some parts of Treasury to his State Department.  The Post Office.  Which he failed in getting.  But he did succeed in transferring the Mint from Treasury to State.  Hamilton even learned that James Madison and Jefferson met with Robert Livingston and Aaron Burr to conspire against Hamilton to remove him from office.  Hamilton saw an ambitious Jefferson.  Who wanted the kind of power Jefferson accused Hamilton wanted for himself.

So these gentlemen began a campaign to force the other from office.  Hamilton had an ally in the Gazette of the United States who championed his policies.  To counter Jefferson hired Philip Freneau into the State Department to help finance a new paper.  The National Gazette.  Whose sole purpose was to attack Hamilton while praising everything Jeffersonian.  Hamilton wrote anonymous attacks published in the Gazette of the United States.  While Jefferson left his dirty work to Freneau.  And the attacks grew uglier.  The attacks were not just on policy or the future vision of the nation.  But these were personal attacks on each other.  Where accuracy was not a major requirement.  Such as when Hamilton took Jefferson out of context.  Quoting selective excerpts from a 1787 letter to suggest that Jefferson wanted to rob the Dutch to repay the French.  Hamilton and Jefferson became like two quarreling children in Washington’s cabinet.  Each running to ‘father’ tattling on the other.  Insisting that Washington demand the resignation of the other.

An outbreak of yellow fever in Philadelphia nearly settled the question.  By almost killing Hamilton.  But he survived.  Unlike some 4,000 others in Philadelphia.  Even Hamilton’s illness was seen through a political lens.  Hamilton sought the medical advice from an old college buddy.  As opposed to following the good advice of Dr. Benjamin Rush.  Who recommended massive bloodlettings.  When Hamilton recovered he publically thanked his friend (who had nothing to do with his recovery) and encouraged others to follow his recommended treatment.  Which didn’t include bloodletting.  Dr. Rush was infuriated.  Accusing Hamilton of killing countless others through this quackery instead of the sensible bloodletting that was established medical practice.  Of course, this was a personal attack on Dr. Rush.  Because he was not a Federalist.  But a Republican.  And a friend of James Madison and Thomas Jefferson.

While the French were causing Headaches for Jefferson and his Republicans the British were doing the same to Hamilton and his Federalists

The yellow fever also claimed another casualty.  The National Gazette.  As people fled Philadelphia, or died, circulation fell.  And the paper lost money and closed shop.  About the same time that happened Jefferson resigned from the cabinet.  And returned to Monticello.  Things were looking up for Hamilton.  Until the reverberations of the French Revolution further divided the country.  The Federalists were reestablishing trade with the British.  So when the French and British were back at war with each other it caused some problems in America.  For the American people still hated Britain.  While having deep emotional ties to the country that had helped them win their independence.  France.  The United States had proclaimed their neutrality in this new war.  But being a maritime nation dependent on exports her best interests lay with Great Britain and the most powerful navy in the world.  Which further proved that Hamilton and his Federalists were secret monarchists.  And that Hamilton wanted to be king.

Meanwhile, the French had sent their new ambassador to America.  Citizen Genêt.  Who Jefferson, the Republicans and the American people welcomed with open arms.  But then he started issuing letters of marque to American captains to attack and capture British shipping.  Bringing them back to American ports to refit them.  Which was a dangerous thing for a neutral nation to do against the nation that kept the sea lanes safe for their commerce.  Then Citizen Genêt tried to raise an American army to attack the Spanish in Florida and in New Orleans.  With further aims of attacking the British in Canada.  This was too much even for Jefferson.  And it was one of the few times that Jefferson and Hamilton were in agreement.  Citizen Genêt had to go.  For Jefferson he was proving to be an embarrassing liability for the Republicans.

While at the same time the British were retaliating.  Issuing orders to blockade France and to seize any neutral shipping trying to supply France with corn.  Which was pretty much any agricultural grain product.  A major export of the United States.  So this was a direct blow against U.S. commerce.  Even though she was a neutral in this current war between France and Great Britain.  This did not make the American people happy.  Nor did it help Hamilton or his Federalists with their rapprochement with Britain.  Then the British began to seize all shipping going to and from the French West Indies.  Which were mostly American ships.  So while Citizen Genêt was causing great headaches for Jefferson and his Republicans the British were doing the same to Hamilton and his Federalists.  Further dividing the nation.  And bringing them closer to war.  In large part due to the politics dividing the nation.

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Thomas Jefferson, Alexander Hamilton, Agrarian Past, Industrial Revolution, Federalists, Republicans, Reynolds Affair and Philip Freneau

Posted by PITHOCRATES - September 20th, 2012

Politics 101

Jefferson could not Turn a Profit on his Plantation and was Forever in Debt Leading to a Lifelong Disdain for Merchants and Bankers

At the time of the Founding America was (and would be for a long time) an agrarian nation.  A country of farmers.  Big and small.  Rich plantations.  And lots of hard-working family farms that were far from being rich.  Yeomen famers.  Who, to borrow a phrase from Oliver Wendell Douglas, “got their hands dirty!”  For those of you too young to recognize this line it’s from the 1960s classic sitcom Green Acres.  Where Douglas was a rich New York City (NYC) attorney who moved out of NYC to Hooterville to be a farmer.  Who he called the backbone of America.  Much like Thomas Jefferson.

Douglas and Jefferson shared a lot in common.  Both were lawyers.  Both were part of high society.  And both could make a good speech (or put something great in writing).  Douglas lived on Park Avenue in NYC.  And he and his wife travelled in the top social circles.  Just like Jefferson.  They both enjoyed the best of the best.  But neither were very good farmers.  The Douglas farm was a disaster despite his best efforts.  While Jefferson could not turn a profit on his plantation.  And was forever in debt.  Leading to a lifelong disdain for merchants and bankers.  Especially merchant bankers.

Alexander Hamilton was born on the British Isle of Nevis.  And raised in St. Croix.  Hamilton was a bastard child.  Illegitimate.  A stigma that spurred him to do everything aggressively in his life to show he was not a second-class person.  He worked at an early age.  In commerce.  And he was very good.  A natural.  Very smart.  And brave.  A veteran of two American wars.  He loved America.  But having been born and raised outside of the country he had no allegiance to any state.  Put it all together and it made Hamilton a nationalist.

Jefferson wanted to hold on to the Agrarian Past while Hamilton wanted to bring on the Industrial Revolution

Hamilton was just as much a Patriot as the other Founding Fathers.  Perhaps more so as he actually served in the Continental Army.  And while serving he saw how poor military power and poor financial power made a country dangerously weak.  The Americans almost lost their Revolution because of a weak nation that could not provide for her army.  So he wanted to make America strong.  And united.  The key in Hamilton’s eyes to making America a powerful nation (like Great Britain) that could stand up against any enemy was a strong union.  And in the Washington administration he advanced policies towards that end.  Ironically, policies that would do more to drive the nation apart.

So Hamilton (Secretary of Treasury) and Jefferson (Secretary of State) could not be more different.  And as they started to push their agendas in the Washington administration they grew to hate each other.  For their visions for America couldn’t be more different.  Despite both being ardent Patriots.  Jefferson wanted to hold on to the agrarian past.  While Hamilton wanted to bring on the Industrial Revolution.  Jefferson believed in the landed aristocracy built upon virtue and talent.  Not the aristocracy money could buy you.  Or birth or a title like in a monarchy.  Which Jefferson believed Hamilton was trying to turn America into.  As did all the farmers throughout the South and in the West.  Who all hated bankers and merchants.  Those people who made money off of other people’s labors.  Investors and speculators.  While speculation in land, on the other hand, was perfectly acceptable as it was what the southern gentry did to acquire their wealth.

And so began the political parties.  The Federalists were for a strong national government that Hamilton tried to make as strong as possible.  And the anti-Federalists.  Who already felt that the national government had grown too strong.  Or as they would become under Jefferson’s leadership, the Republicans (which were NOT the forbears of the current Republican Party).  In general, southern planters.  While Hamilton led the Federalists.  In general, northern businessmen.  The game of politics was born.  And it got dirty pretty quickly.  Thanks to each party’s friends in the media.  The newspapers of the day.  Which were pretty much political arms of these parties.

The Newspapers launched Vitriol at each Other including a Lot of Lies, Slander and Libel

The Treasury Department was the largest government department.  It was huge.  With a huge budget.  Whereas the State Department was basically Jefferson and a few clerks.  Hamilton no doubt felt he was the most important man in America next to the president.  And Jefferson was sure that Hamilton was using his position to steal money from the treasury.  So sure that Jefferson and his Republicans launched Congressional investigations that turned up nothing.  Convincing Jefferson that Hamilton was a better thief than even he had imagined.  Jefferson still pressed and had a colleague introduce multiple resolutions in Congress against Hamilton hoping to get Hamilton thrown from office on a House vote.  The House voted down all resolutions.

James Reynolds was a con man who made his money by defrauding veterans.  And other criminal pursuits.  Tired of the scale of these scores he came to Philadelphia to make some bigger money.  By using his wife, Maria, to seduce and have an affair with Alexander Hamilton.  So he could blackmail him.  Which she did.  Then he did.  When Reynolds’ criminal past caught up with him and sent him to jail he talked about the affair.  Which was more than just an affair.  He told some Republicans that he and Hamilton were using treasury funds to fund speculation for personal gain.  Jefferson and the Republicans were overjoyed.  Sure that they at last had a way to get rid of Hamilton. When confronted in his home to answer these charges he fessed up and told the truth.  Which included no speculation with treasury funds.  While all the money paid to Reynolds came from his own pocket.  All treasury funds were present and accounted for.  Politicians being the gentlemen they were then were satisfied and promised to never speak of Hamilton’s marital indiscretions.

So the political battle between Hamilton and Jefferson would carry on in the press.  Hamilton contributed most of his writings to the Gazette of the United States which wrote positively about Federalist policies.  And enjoyed a national circulation.  So Jefferson countered that by setting up a Republican national paper.  The National Gazette.  Who James Madison helped kick off by convincing Philip Freneau to come to Philadelphia to edit the paper.  Which he did.  And Jefferson helped him with his finances by hiring him into the State Department.  Putting him on the payroll to attack Washington’s treasury secretary while he was the sitting Secretary of State.  Trying to undermine the very administration he belonged to.  And the war between the two men escalated.  The papers launched vitriol at each other.  Including a lot of lies, slander and libel.  Enlisting other papers to join in the journalistic malfeasance.  People who talk about negative political campaigns today have no idea how ugly it was back then.  There was no interest in reaching across the aisle.  They just wanted to destroy the opposition so they could advance their policies.   Much like it is today.  Only without it being about principle.  But advancing the privileged government class.  That other aristocracy that Jefferson hated.

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Federalists, Anti- Federalists, Washington, Adams, Hamilton, Madison, Jefferson, French Revolution and Hamilton’s Three Reports

Posted by PITHOCRATES - August 9th, 2012

Politics 101

Washington looked upon Hamilton, Madison and Jefferson as the Sons he Never Had

With the new Constitution ratified it was time to put the grand experiment into action.  Beginning with America’s first presidential election.  And the system we now call the Electoral College.  Each state chose their electors.  These electors then voted for the president.  Even this first act of the new federal government was a safeguard to keep its power limited.  (And independent of the Congress.)  By keeping the new republican government from becoming a democracy.  The mob-rule that was the ruin of republics.  By putting intermediaries between the people and the most powerful person in America.  The president.  To prevent anyone rising to power simply by promising to shower riches on the people from the federal treasury.

George Washington did something no one has done since.  He received 100% of the vote.  Every elector voted for him for president.  Unanimously.  John Adams came in second.  Each elector had two votes.  One to cast for president.  The other to cast for vice president.  The one with the greatest number of votes was president.  The one with the next most votes became vice president.  As this was a time before party politics.  There were no political parties yet.  But there would be.  And that would change the way we voted for president.

Both Washington and Adams were Federalists.  They both supported the Constitution.  And the federal government.  As did the other Federalists.  Including Alexander Hamilton.  Who Washington selected as secretary of the treasury.  And would be a major player in the Federalist camp.  His fellow Federalist, James Madison, who coauthored the Federalist Papers with Hamilton (and John Jay) won election to the House of Representative.  Where he introduced and fought for passage of the Bill of Rights.  Thomas Jefferson, author of the Declaration of Independence, was in Europe during the Philadelphia Convention and the ratification process of the Constitution.  But he supported it as long as it included a bill of rights.  Washington selected Jefferson for his secretary of state.  Washington looked upon Hamilton, Madison and Jefferson as the sons he never had.  And loved them as sons.  But that would change.

Born out of Wedlock Hamilton was Never Accepted by those ‘Better’ than Him

Washington being the first president everything he did set a precedent.  And he was very conscious of that.  As well as his place in history.  For he wanted to be remembered as America’s first president of many to come.  Not the man who was at the helm when this experiment in self-government failed.  This is why he created a cabinet quickly.  Even though the Constitution included nothing about a cabinet.  After commanding the Continental Army for 8 years he knew how to give orders and delegate authority.  And after battling Congress during those same years he became a good administrator who understood how to compromise.  He hated politics.  But he understood politics.  And knew it meant compromise on the little things.  And standing resolute on the bigger things.

Hamilton was Washington’s aide-de-camp during the war.  He was smart and understood commerce.  During the war he wrote to Congress about the ruinous inflation crippling the economy.  And starving the army.  Proposing a national bank back then.  Washington trusted and respected Hamilton.  And valued his counsel.  Which is why he made him his secretary of treasury.  The country was in a mess.  In debt.  And it needed a plan to raise revenue.  To pay for government.  And to service that debt.  Even just to understand the debt.  For money was owed at every level of government.  Which was what prompted the Philadelphia Convention in the first place.  To put the nation on a sound footing to move forward.  And there wasn’t a better person available than Hamilton.  Who remains even today America’s greatest treasury secretary.

Hamilton was brilliant.  And he had grand plans for the United States.  He saw the potential in the new nation.  And he wanted to use the power of government to hurry it along.  He was also aggressive.  And combative.  Born out of wedlock he was never accepted by those ‘better’ than him.  So he spent a lifetime fighting this social stigma.  Acquiring a competitive nature.  Making him unpopular.  And obstinate.  He fought long and hard for what he wanted.  Knowing that he was right.  And others were wrong.  Even though this may have been true at times it tended to be off-putting.  So Hamilton would spend his political career making political enemies.  And it started in the Washington administration.

After Hamilton’s Three Reports James Madison parted ways with Hamilton and became an Anti-Federalist

While the Americans were setting up their first national government France was well along the way to the French Revolution.  And Thomas Jefferson was there.  Returning to the United States the same year of the Tennis Court Oath and the Storming of the Bastille (1789).  The French had a taste of liberty from helping the Americans.  And now they wanted it, too.  France was drowning in debt.  A bad growing season caused some famine.  The people were restless.  Poor.  Angry.  And sick of the monarchy.  Jefferson felt the spirit of ’76 again.  He joined the conversations in the clubs where the radicals met.  Enjoying their company.  Sharing their hate of monarchy.  Despite the French Monarchy having financed most of the American Revolution.  And provided much of the material to wage war.  Didn’t matter.  The people’s spirit inflamed him, too.  And he brought that spirit home with him.  Upon arrival Washington asked him to join his cabinet.  He accepted.  And the head butting began.

It started with Hamilton’s three reports.  The Report on Public Credit (January 1790).  The Report on a National Bank (December 1790).  And the Report on Manufactures (December 1791).  Taken together they kind of looked like a plan to turn the United States into another Great Britain.  At least to Jefferson, Madison and anti-Federalists everywhere.  What they saw was a nation with lots of debt, where the rich get a little too cozy with the politicians and the financiers reach deep into the halls of government.  That wasn’t Hamilton’s intent.  Other than wanting to accelerate the Industrial Revolution in American to the level it was in Britain.  The subject of his third report.  Which was a bit mercantilist in nature like Britain.  But the other two were about establishing good credit.  To gain the trust of the credit markets.  For a country in debt had to be able to borrow money to service that debt.  As well as pay for government.  Putting the nation on that sound footing to move forward.  Which he did.  He lowered the per capita debt.  And the nation would go on to enjoy a decade of peace and prosperity thanks to his economic policies.

After Hamilton’s three reports came the great schism.  James Madison parted ways with Hamilton.  Becoming an anti-Federalist.  Along with Thomas Jefferson.  While still a member of the Federalist administration of George Washington (though he didn’t label himself a Federalist or join in any partisan action).  Cabinet meetings became insufferable.  As Hamilton and Jefferson just hated each other.  Who could only behave in the presence of their ‘father’.  George Washington.  But the partisan attacks took to the newspapers.  Lies and slander flew with regularity.  From both directions.  Even attacking Washington.  Jefferson eventually left the administration but continued his attacks through his surrogate James Madison.  The attacks on Washington got so ugly that he never spoke to Jefferson again.   Who turned into a radical partisan.  Washington was never happier when his second term ended.  The new president was John Adams.  Federalist.  His vice president was Thomas Jefferson.  Leader of the anti-Federalists.   Who became the new Democrat-Republicans.  Which is why they had to change the election process for president.  So the president and the vice president belonged to the same political party.  So they worked together instead of leading the attack against each other and their party.

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John Locke, Charles de Montesquieu, Republican Government, Separation of Powers, Enumerated Powers, Federalists and anti-Federalists

Posted by PITHOCRATES - July 26th, 2012

Politics 101

Funny thing about the Americans is that they just didn’t Like Paying Taxes

United we stood.  For awhile.  Until we defeated the British at Yorktown.  And negotiated the Treaty of Paris where Great Britain recognized our independence from the British Crown.  But people grew weary of the war.  On both sides of the Atlantic.  And those in the once united states (small ‘u’ and small ‘s’) were eager to retreat to their states.  And forget about the Continental Congress.  The Continental Army.  And everything to do with the confederation.  Threatening to undo everything they fought for.  Because of their sectional interests.

Shays Rebellion nearly pushed the country into anarchy.  It was the tipping point.  They had to do something.  Because if they weren’t united they would surely fall.  They owed Europe a fortune that they had no hope of repaying.  Funny thing about the Americans.  They just didn’t like paying taxes.  Making it difficult to repay their debts.  The Europeans gave them little respect.  France tried to sell them out during the peace talks to rebalance the balance of power in their favor.  Spain wanted to keep them east of the Mississippi River.  And off of the Mississippi.  Even refused them passage through the Port of New Orleans.  Britain didn’t evacuate their western forts.  The Barbary pirates were capturing American shipping in the Mediterranean and selling their crews into slavery.  And Catherine the Great of Russia wouldn’t even meet the American ambassador.  So the Americans were the Rodney Dangerfield of nations.  They got no respect.

In 1787 delegates gathered in Philadelphia.  To revise the Articles of Confederation to address these problems.  Some enthusiastically.  Some begrudgingly.  While one state refused to attend.  Rhode Island.  For they were quite happy with the way things were.  As the smallest sate in the union they had the power to kill almost any legislation that didn’t benefit Rhode Island.  For some legislation the vote had to be unanimous.  And they enjoyed charging other states tariffs for their goods unloaded in Rhode Island ports.  Things were so nice in Rhode Island that they didn’t need much taxation.  Because they had other states funding their needs.  Thanks to those tariffs.  Of course, this did little to benefit the union.  While imposing taxes on their neighbors in the union.  Sort of like taxation without representation.  Funny thing about Americans, though.  They didn’t like paying taxes.

Montesquieu said a Republican Government must Separate Power into Three Branches

Thomas Jefferson was in Europe in 1787.  John Adams, too.  But just about every other “demi-god” (as Jefferson called those at that gathering) was in Philadelphia in 1787.  America’s patriarch Benjamin Franklin.  The indispensable George Washington.  The financially savvy Alexander Hamilton.  The studious James Madison.  The Framers of the Constitution.  Highly principled men.  Well read men.  Prosperous men.  Who were familiar with world history.  And read the great enlightenment philosophers.  Like John Locke.  Who especially influenced the writing of the Declaration of Independence.  With his inalienable rights.  Consent of the governed.  And property rights.

As they gathered in Philadelphia to revise the Articles it became clear that they needed something more.  A new constitution.  A stronger federal government.  With the power to tax so they could raise money.  For without money the union could not solve any of its problems.  So they set upon writing a new constitution for a new government.  A republican government of republican states.  As they began to frame this constitution they drew on the work of a French philosopher.  Charles de Montesquieu.  Who championed republican government.  The ideal government.  A government of the people who ruled at the consent of the governed.  With built-in safeguards to protect the people’s inalienable rights.  The key requirement being the separation of powers.

Montesquieu said a republican government must separate power into three branches.  The legislature, the executive and the judiciary.  A nation of laws requires a legislature to write the laws.  Because the laws must respect the inalienable rights of the people the people must elect the legislature from the general population.  So the legislature’s interests are the people’s interest.  However, if the legislature was also the executive they could easily write laws that represented their interests instead of the people.  Elevating the legislature into a dictatorship.  If the legislature was also the judiciary they could interpret law to favor their interests instead of the people.  Elevating the legislature into a dictatorship.  Likewise if the executive could write and interpret law the executive could elevate into a dictatorship.  Ditto for the judiciary if they could write the law they were interpreting.  So the separation of powers is the greatest protection the people have against a government’s oppression.

If a Power wasn’t Delegated to the New Federal Government it Remained with the States

During the Constitutional Convention they debated long and they debated hard.  The Federalists were in favor of a stronger central government.  The anti-Federalists were not.  The Federalists included those who served in the Army and the Congress.  The anti-Federalists were those who didn’t serve ‘nationally’ and favored states’ rights.  In general.  So one side wanted to increase the power of the central government while the other side wanted no central government.  For their fear was that a new federal government would consolidate power and subordinate the states to its rule.  As if the last war never happened.  And the states would still bow to a distant central power.  Only this time to one on this side of the Atlantic.

So the balance they struck was a two-house (i.e., bicameral) legislature.  A House of Representatives.  And a Senate.  The people in each state elected a number of representatives proportional to their state’s population.  So a large state had a large representation in the House.  So that house represented the will of the people.  To prevent the tyranny of the minority.  So a small privileged class couldn’t rule as they pleased.  Whereas the Senate prevented the tyranny of the majority.  By giving each state two senators.  So small states had the same say as big states.  Together they represented both the majority and the minority.  Further, states’ legislatures chose their senators (changed later by Constitutional amendment).  Providing the states a check on federal legislation.

To round things out there was an executive they called the president.  And a judiciary.  Providing the separation of powers per Montesquieu.  They further limited the central government’s powers by enumerating their powers.  The new federal government could only do what the Constitution said it could do.  Treat with foreign powers.  Coin a national currency.  Declare war.  Etc.  If a power wasn’t delegated to the new federal government it remained with the states.  To give the new federal government some power.  Including the power to tax.  While leaving most powers with the states.  Striking a compromise between the Federalists and the anti-Federalists.

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LESSONS LEARNED #33: “The Founding Fathers weren’t perfect but they were closer than most.” -Old Pithy

Posted by PITHOCRATES - September 30th, 2010

Anarchy Averted

Washington men didn’t live long.  And George Washington thought about that.  A lot.  He loved his Mount Vernon.  His garden.  And he longed to retire there to spend out his years in peace under his vine and fig tree.  But he gave up that dream when he accepted command of the Continental Army.  He was already at that age when a lot of Washington men died.  So when he left, no doubt he thought he may not return.

The Revolutionary War lasted 8 long years.  And Washington spent those years with the army.  In the field.  He was at Valley Forge.  He didn’t leave to go home to see Martha.  No.  His wife came to Valley Forge to see him.

Washington was a wealthy man.  He didn’t need to make these sacrifices.  A lot of wealthy men didn’t.  But he did.  And he sacrificed a lot.  Even his eyesight.  When the army officer’s wanted to mutiny over a long list of failed promises (pay, pensions, etc.), Washington pleaded with them.  To not throw away the thing they’ve fought so long and hard for.  As poorly as the Continental Army was treated, those words did not move them much.  Then Washington pulled out a letter from a congressman to read to them.  But couldn’t.  After stumbling over a couple of words, he stopped.  He then pulled out a pair of spectacles.  No one had ever seen the great George Washington in such a public display of weakness.

“Gentlemen, you must pardon me,” he said.  “I have grown gray in the service of my country, and now find myself growing blind.”

Some cried for the old man who had given so much.  When he no doubt had so few years left to live.  If their commanding general could make such sacrifices, so could they.  So there would be no Caesar.  No Cromwell.  No armies would march to the seat of power.  This republic would not collapse into anarchy as history often scripted her republics.

The Most Powerful Man in America Surrenders His Power         

But would he be king?  He could have.  Easily.  He had the power.  And the love and adoration of the people.  In fact, some were begging him to become king.  Others, though, questioned his intentions.  They looked at the army with a nervous unease.  They were, after all, a nation built primarily from English stock.  And they knew their English history.  Of Oliver Cromwell.  The New Model Army.  Just what were his intentions?

He still stayed in touch with his officers (and later would go on to be the first president of the Society of the Cincinnati).  This seemed a bit ominous to some.  This is why once the war was over, people tried to forget about and disband the army as quickly as possible.  To renege on the promises they made to these veterans.  They just wanted these soldiers to go away.  There were too many bad memories of standing armies in their midst.  Whether they wore a red coat or a rag, they just wanted them gone.

Even King George questioned his intentions.  Few give up power.  If he did, it would place him in the pantheon of greats.  But would he?  Yes.  He would.  And did.  Washington would be a Lucius Quinctius Cincinnatus, the Roman farmer who walked away from his plow to assume dictatorial powers to help save his nation.  When the threat was past, he returned power to the Senate and returned to his plow.  And so did Washington.

Answering the Call of Duty.  Again.

Then the nation called for their Cincinnatus once again.  There were problems with the Confederate Congress.  It was having difficulty governing the peace.  There were state rivalries.  Their finances were in a mess.  And there was no national identity.  There used to be.  British.  And the European nations treated with that singular entity.  Great Britain.  Now that the mother country was gone, there was no singular entity.  No unity.  Everyone was for themselves.  And the European powers had to make multiple treaties with the multiple states.  If they wanted to go through that headache.  And many did not.

Some called for a revision to the Articles of Confederation.  But it was difficult to get the states on board.  A weak confederacy favored the individual states.  And the individual states liked that.  But it also limited their potential as a nation.  Some feared the inter-state rivalries would balkanize the nation.  Make the New World a repeat of the Old World.  To bring the nation together would take an extraordinary effort.  Or an extraordinary man.  George Washington.  Who agreed to attend the Philadelphia Convention in 1787. 

After a long and hot summer, the Philadelphia delegates produced a constitution.  With James Madison being the primary architect.  They then sent it to the states for ratification.  At which time James Madison and Alexander Hamilton began a writing campaign to urge its ratification.  (John Jay contributed to this campaign, too, but not as much as Madison and Hamilton).  Once ratified, it came time to populate the new government.  Some competed with each other for some positions.  But for one of the positions there was unanimity.    There was but one man the people would trust with the most powerful office in the land.  Their Cincinnatus.  George Washington.  But would he do it?  Would he leave his blissful retirement beneath his vine and fig tree?

Yes.  Not because he wanted to.  More than 10 years had passed since this old man had agreed to command the Continental Army.  He had outlived many Washington men.  The way he saw it, he was living on borrowed time as it was.  And there was another consideration.  Against the greatest of odds, he did NOT lose the Revolutionary War.  He had made mistakes in his life, but his name was safe for posterity.  But if he took a risk now he could lose the good name he built.  And if there was anything soldiers (and politicians) worry about, it’s their legacy.  (That’s why they write memoirs.)

Another Long 8 Years

When it was clear that he was, in fact, the indispensable one, he sacrificed his personal want for the public need.  Again.  And again, serving a second term as president.  He was ready (and looking forward to) retirement after one term.  But the party politics were threatening to tear apart the new nation.  The rift between Jefferson and Hamilton had grown.  It was splitting the government into two camps.  The Federalists (led by Hamilton) and the anti-Federalists (led by Jefferson).  They pleaded for Washington to serve a second term as he was the only one who could hold them together.  He consented.

That second term was particularly unpleasant for Washington.  Party attacks turned into personal attacks.  Even against Washington.  And the ugliness got really ugly over the Jay Treaty.  Many wanted war with Great Britain.  But having actually fought a war with Great Britain, Washington favored peace.  Yes, the treaty favored Great Britain.  And, yes, it tied American interests to Great Britain, not her war time ally.  France.  The Jeffersonians unleashed an unfettered vitriol on the Federalists.  Including Washington.  But Washington bet on the right horse.  Great Britain proved to be the dominant European power.  And her Royal Navy came in handy protecting U.S. trade with her.  Over a decade of peace and prosperity followed. 

After 8 years, though, there was no persuading Washington for another 4-year term.  He had grown ever older in the continued service of his country.  Now he felt it more than ever that his days were few.  Rarely did he know happiness like he felt at the inauguration of the 2nd president, his vice president, John Adams.  Adams wrote that after he took the oath of office, Washington said, “Ay! I am fairly out and you fairly in!  See which of us will be happiest!”  He may not have actually said this but he no doubt felt the sentiment.  And with that, he returned to his plow.  Cincinnatus had come home.  Where he would happily live out his remaining years.  All two of them.

Where is Our Cincinnatus?

Today it’s about money and power.  Not duty.  Today, people want to be full-time politicians.  For the money and power.  And the elitist status.  People get into Congress and they just don’t want to leave.  Should we vote them out of office, they have a tantrum.  They call their constituents stupid for not knowing who the better candidate was.  And they won’t go quietly.  Some will change parties.  Or run as an independent.  Or as a write-in candidate.  Anything to stay in Washington.  To hold on to their power.  To stay among the elite.

The nation has deviated far from the path of disinterested public service of the Founding Fathers.  The anti-Federalists would be shocked to see what became of the government they helped create.  Even the Federalists.  Even Hamilton.  Not even he, the champion of a strong federal government, would approve of the federal government today.  His mercantilist polices had the goal of making the nation rich and powerful.  Not to suck the wealth out from the private sector.  Which began in earnest with Wilson.  Then picked with FDR.  Then ramped up further with LBJ/Nixon/Ford/Carter.  Had Hamilton lived in the 20th century, he would have earnestly campaigned for Ronald Reagan.  To put an end to the public sector’s pillage of the private sector.

And now we find our nation adrift again.  But who will step in and stop it today?  Who is out there?  Willing to put down their plow for disinterested public service.  And by ‘plow’ I mean any real job.  Worked by someone who is not part of the Washington establishment.  Where is our George Washington?

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LESSONS LEARNED #11: “Before you condemn capitalism, imagine a world without professional sports, movies, cell phones and tampons.” -Old Pithy

Posted by PITHOCRATES - April 29th, 2010

AT THE END of the American Revolution the world said, “Okay.  Now what?”  We were a joke.  We were broke.  We were weak.  And now that the common enemy was no more, we weren’t very united any more.  Most assumed we would end up back with Great Britain.  And because of that many thought there was no sense rushing in to make treaties that will just have to be unmade.

It was complicated dealing with us.  In a confederacy of strong states, it was not easy making trade or treaties.  Multiple currencies, tariffs, laws, etc.  To enter the world of the European powers, America needed to put on her big boy pants and speak with one voice.  Some Founding Fathers saw this.  That’s why they met in Philadelphia and drafted the Constitution.  And with ratification, we had one voice.

ALEXANDER HAMILTON WAS a capitalist.  Thomas Jefferson was not.  Hamilton understood money and finance.  Jefferson did not.  Hamilton liked manufacturing and commerce.  Jefferson did not.  He thought everyone should be a simple farmer.  Everyone, that is, but him.

When elected president, people hailed Jefferson as the people’s president.  Simple, unassuming, the epitome of egalitarian republicanism.  Only thing was, there wasn’t anything simple, unassuming or egalitarian about him.  He attacked the nobility, the corruption of big cities and the evils of commerce and the ‘money’ men.  Yet he indulged in the good life like no other American.  He always lived beyond his means.  He lavished himself in the finest luxuries of the time.  And he absolutely loved Paris though it was everything he said he hated.

Hamilton put America’s financial house in order.  He helped give the new nation legitimacy.  He opened European credit to us.  Problem was that, in Jefferson’s eyes, America was becoming too much like Great Britain.  And worse, it was becoming less Virginian.  So they squared off and fought each other.  Tooth and nail.  They gave birth to America’s first political parties (Federalists and Republicans).  They viciously attacked each other in the press.  Yes, politics were nasty right from the beginning.

Then something happened that caused Jefferson to embrace much of what Hamilton did.  He fell ass-backwards into the Louisiana Purchase.

THERE WERE DREAMS of a French empire in North America.  But the slave uprising in Saint-Domingue (present day Haiti) put the kibosh on that.  With Saint-Domingue lost, there was no point in France keeping New Orleans or the Louisiana territory beyond.  And Napoleon needed money.  He was at war.  And that war was about to expand to include Great Britain.  So he offered it all to the Americans for about 15 million dollars.  Though a steal, 15 million was still a lot of money.  And then Jefferson embraced what that capitalistic bastard (we can call him that for Hamilton was the fruit of unmarried loins) created. 

(This sale was also strategic.  By expanding America’s western border, it kept that land from falling to the British.  America would grow and, in time, a stronger America would challenge Great Britain for all that sea-going commerce in the Atlantic.  If it couldn’t go to the French, better it go to the Americans.  And, in the process, it would really piss off the British.  Like I said, strategic.)

The deal included gold, bonds and some debt assumption.  Jefferson was adamantly opposed to Hamilton’s assumption of states’ debt back in Washington’s administration for it only aggrandized the central government.  And Jefferson absolutely hated banking (probably because he was forever in debt).  And though he was brilliant, he was not so brilliant when you put dollar signs in front of things.  Jefferson made the purchase, but the bond deal put together was pure Hamiltonian. 

France wanted cash.  We didn’t have it.  But we now had established credit in Europe.  We could issue bonds.  Because of our credit worthiness, the Dutch were willing to buy those bonds from France at a discount and give France the cash Napoleon wanted.  And, voilà, Hamilton’s capitalism allowed Jefferson to double the size of the United States while reducing the threat in North America from the competing European powers (Great Britain, France and Spain).  It also enabled Napoleon to cause further mischief in Europe (an unfortunate side affect).  Sorry about that, Europe.  It was an unintended consequence.

THE FREE FLOW of ideas and capital can define capitalism.  Some people have great ideas.  Others have lots of money and are willing to take a risk.  Separately, these two don’t do much to make life better.  But bring them together, though, and let the good times roll.

Venture capitalists are rich.  And they’re looking to get richer.  It’s what they’re good at.  They look for talent.  New start-up companies with a good idea.  An idea that may change the world.  They may not have that creative spark to create something new, but they can recognize that spark when they see it.  And when they see it, they want to finance it.  If they pick a winner, we may get that something that changes the world.  And they may make a dump truck full of money.  Everyone wins.

Venture capitalists bring in money.  And talent.  The entrepreneur spends his or her time creating.  The venture capitalist helps build the business.  Kind of like a mentor.  They can be demanding, though.  And impatient.  They expect a big profit on their investment.  And they don’t want to wait around forever to get it.  When things work, they can work well.  Very well.  The entrepreneurs create something new and remarkable that everyone must have.  They then take their company public.  Their initial public offering brings in gazillions.  And those initial investors (the entrepreneurs and the venture capitalists) get incredibly rich.

IN 1976, THREE guys had an idea.  They made an electronic device in a garage that they thought people would want to buy.  It was crude and ‘some’ assembly was required.  And by ‘some’ I mean a lot.  Initial financing was limited.  A car and a scientific calculator just didn’t sell for a lot.  Two of them (one had since left the company) approached a couple of venture capitalists who introduced them to a man by the name of Armas Clifford (Mike) Markkula Jr.  He, too, was a venture capitalist.  And an engineer to boot.

Markkula joined the company.  He was one of the driving forces behind a new product introduced in 1984.  Their Super Bowl ad was, is, a classic.  That product was the Macintosh computer.  Those two men introduced to Markkula were Steve Jobs and Stephen Wozniak.  That company is, of course, Apple.  Today, Apple’s iPhone dominates the market.  And they’re still innovating.  Thanks to a venture capitalist willing to take a risk.

CAPITALISM CAN DO remarkable things.  It can build a nation.  Or change a world.

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