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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LESSONS LEARNED #19: “Philosophical debates can be effective but character assassination is more expedient, especially when no one agrees with your philosophy.” -Old Pithy

Posted by PITHOCRATES - June 24th, 2010

THOMAS JEFFERSON HATED Alexander Hamilton.  So much so he hired Philip Freneau as a translator in his State Department in George Washington’s administration.  You see, Jefferson did not like confrontation.  So he needed a way to slander Hamilton, his policies and the Washington administration without getting his own hands dirty.  And that was what Freneau was supposed to do with the money he earned while working in the State Department.  Publish a newspaper (National Gazette) and attack Hamilton, his policies and the Washington administration.  Papers then were partisan.  More so than today.  Then, lies and libel were tools of the trade.  And they knew how to dig up the dirt.  Or make it up. 

Another scandalmonger, James Callender, was slinging dirt for Jefferson.  And he hit pay dirt.  Mr. and Mrs. Reynolds of Philadelphia had a lucrative business.  They were blackmailing Alexander Hamilton.  Mr. Reynolds had his wife seduce Hamilton.  Which she did.  And did well.  They had an affair.  And Mr. Reynolds then blackmailed him.  Jefferson pounced.  Or, rather, Callender did.  To keep Jefferson’s hands clean.  Hamilton, Callender said, was using his position at the Treasury Department for personal gain.  He was using public funds to pay the blackmailer.  They found no proof of this.  And they did look for it.  Hard.  But when they came up empty, Jefferson said that it just proved what a good thief Hamilton was.  He was so good that he didn’t leave any traces of his treachery behind.

Of course, when you lie down with dogs, you get up with fleas.  And Jefferson’s association with Callender would come back and bite him in the ass.  In a big way.  Upset because Jefferson didn’t appropriately compensate him for all his loyal dirt slinging (he wanted the postmaster’s job in Richmond), he publicized the Sally Hemings rumors.  And after breaking the true story of the Hamilton affair, many would believe this scoop.  That Jefferson was having an affair with one of his slaves.  It was a dark cloud that would forever hang over Jefferson.  And his legacy.

Hamilton admitted to his affair.  Jefferson admitted to no affair.  Hamilton would never hold public office again and would later die in a duel with Jefferson’s one-time toady, Aaron Burr.  This duel resulted because Hamilton was doing whatever he could to keep the amoral and unscrupulous Burr from public office (in this case, it was the governorship of New York).  When the election of 1800 resulted in a tie between Jefferson and Burr, Hamilton urged the House to vote for Jefferson, his archenemy.   Despite what had appeared in the press, Hamilton did have morals and scruples.  Unlike some.  Speaking of which, Jefferson would go on to serve 2 terms as president.  And all of that angst about Hamiltonian policies?  They all went out the window with the Louisiana Purchase (which was unconstitutional, Big Government and Big Finance).

RONALD REAGAN WAS routinely called old, senile and out of touch by the entertainment community, the media and his political foes.  But he bested Mikhail Gorbachev and the Soviet Union, something Jimmy Carter never did.  He said ‘no’ at Reykjavik because he told the American people that he wouldn’t give up the Strategic Defense Initiative (SDI).  He knew the Soviet Union was bleeding.  Communism was a farce.  It inhibited human capital.  And impoverished her people.  SDI may have been science fiction in the 1980s, but capitalism wasn’t.  It could do it all.  Including SDI.  The Soviet Union was on the ropes and Reagan would give no quarter.  The days of living in fear of the mushroom cloud were over.  And capitalism would deliver the knockout punch.

Reaganomics, of course, made this all possible.  Supply-side economics.  Which follows the Austrian school.  Say’s Law.  ‘Supply creates demand’.  You don’t stimulate the economy by taxing one group of people so another group can spend.  You stimulate it by creating incentives for risk takers to take risks.  And when they do, they create jobs.  And wealth.

Tax and spend is a failed Keynesian, zero-sum economic policy.  When you take from the earners and give to the non-earners, we just transfer purchasing power.  We don’t create it.  For some to spend more, others must spend less.  Hence, zero-sum.  The net some of goods and services people are purchasing remains the same.  Different people are just doing the purchasing.

When Apple invented the Macintosh personal computer (PC), few were demanding a PC with a graphical user interface (GUI).  But Apple was innovative.  They created something they thought the people would want.  And they did.  They took a risk.  And the Macintosh with its mouse and GUI took off.  Apple manufacturing increased and added jobs.  Retail outlets for the Macintosh expanded and created jobs.  Software firms hired more engineers to write code.  And other firms hired more people to engineer and manufacture PC accessories.  There was a net increase in jobs and wealth.  Just as Say’s Law predicts.  Supply-side economics works.

Of course, the Left hates Reagan and attacked Reaganomics with a vengeance.  They attacked Reagan for being pro-rich.  For not caring about the poor.  And they revised history.  They say the only thing the Reagan tax cuts gave us were record deficits.  Of course, what those tax cuts gave us were record tax receipts.  The government never collected more money.  The House of Representatives (who spends the money), awash in cash, just spent that money faster than the treasury collected it.  The record shows Reaganomics worked.  Lower tax rates spurred economic activity.  More activity generated more jobs and more personal wealth.  Which resulted in more people paying more taxes.  More people paying taxes at a lower rate equaled more tax revenue in the aggregate.  It works.  And it works every time people try it. 

Because Reaganomics worked and showed the Left’s policies were failures, they had to attack Reagan.  To discredit him.  They had to destroy the man.  Except when they’re running for elected office.  Then they strive to show how much more Reagan-like they are than their conservative opponents.  Because they know Reaganomics worked.  And they know that we know Reaganomics worked.

GEORGE W. BUSH was routinely called an ‘idiot’ by the entertainment community, the media and his political foes.  Yet this ‘idiot’ seems to have outwitted the elite of the liberal Left time and time again.  I mean, if their policies were winning, they would be no reason to have attacked Bush in the first place.  The Left hated him with such vitriol that they said he blew up the Twin Towers on 9/11 as a justification for invading Iraq for her oil.  It was Big Oil’s lust for profit, after all, that was driving this Texan’s Big Oil policies.  And taking Iraq’s oil would increase Big Oil’s sales and give her even more obscene profits.

If Bush was an idiot, he must have been an idiot genius to come up with a plan like that.  Then again, gasoline prices crept to $4/gallon following the Iraq War.  Had all that oil gone on the market according to plan, that wouldn’t have happened.  Unless the plan was to keep that oil OFF of the market, thus, by rules of supply and demand, the price of oil (and the gasoline we make from it) would go up thus enriching Big Oil through higher prices resulting from a lower sales volume.  My god, what evil genius.  For an idiot.  Of course, gas taxes, numerous summer gas blends (required by the government’s environmental policies), an aging and over-taxed pipeline infrastructure and insufficient refinery capacity (the government’s environmental policies make it too punishing even to consider building a new refinery) to meet increasing demand (soaring in India and China) had nothing to do with the rise in gas prices.

IS THE POLITICAL Left evil?  Probably not.  Just amoral.  They have an agenda.  They survive on political spoils and patronage.  Old time politics.  Enrich themselves through cronyism.  If tribute is paid they’ll extend favorable treatment.  If tribute is not paid, they will release their wrath via hostile regulation, litigation, Congressional investigation and punitive taxation.  Just like they did to Big Tobacco (and, no, it wasn’t about our health.  They could have just made tobacco illegal.  But they didn’t.  Why?  It just brings in way too much money to the government.  Via sin taxes.  And federal lawsuits.  And with it being addictive, it’s a frickin cash piñata for them.)

They know few agree with their philosophy.  But they don’t care.  It’s not about national prosperity.  It’s about power.  And they want it.  That’s why they can’t debate the issues.  They know they can’t win.  So they attack the messenger.  Not the message.  If you don’t believe that, you can ask Abraham Lincoln, Ronald Reagan, George W. Bush, Sarah Palin and just about any other Republican.  Well, you can’t ask Lincoln or Reagan.  But you can guess what they would say.

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