Financial Crisis: Our Founding Fathers' America

In many ways, the current financial unraveling should be viewed under the auspices of two Founding Fathers, Alexander Hamilton and Thomas Jefferson.

Thomas Jefferson, an Anti-Federalist viewed big business in general, and financiers in particular as corrupt. He preferred the average man to be a farmer as opposed to a banker. Jefferson feared that big cities and big money would indeed corrupt the morals and values of the American people (as it did throughout history as in Rome).

The Federalist, Alexander Hamilton simply accepted the fact that the benefits of business, and a financier class far out-weighed the liabilities. If America was to be great, financial institutions would lead the way. Since when did a nation ever farm its way to greatness?

Most of us are aghast at the risk of impending financial crisis. But what seems to bother us more is the extent to which our government is manipulated by that class of individuals. It could well be that Alexander Hamilton's vision became corrupted by the greed of human nature. However, we would also conclude that the financier class will ALWAYS be bailed out by the government, even though it is at the expense of the masses... In the grand scheme of things, there is no such thing as moral hazard nor malfesence in modern America. see discount windows, SEC trading policies, and Federal Backstops. Maybe a bailout for revolving credit card debt is next..

Comments

[kkin365:]

I read that the Treasury department is nicknamed the Washington branch of GS. So, what is new?

2008 Sep 01 09:57 AM

[ResourceWise:]

Rule of law is an essential requirement for any civilization to thrive in the long term. The traditional lack of transparency in financial markets breeds a culture of ‘winner takes all’, in other words war by another name. The outcomes of such wars are bad for most, beneficial for a few. Unless the US leads in creating transparency, we can be sure that this is just one more unfortunate chapter of a play book that needs a new revised edition now!

2008 Sep 01 10:40 AM

[nukldrager:]

Bailout for revolving credit card would be fair. But the next bailout? Not in the lifetime of this cosmos.

2008 Sep 01 01:54 PM

[famos:]

Hi Brian,

I believe both Hamilton and Jefferson were both right to some extent. I know, I sound just like an economist or broker, but ..... Although, I respect Jefferson very much, his vision was a little short sighted in regard to the future technology (Ben Franklin's specialty) and economic potential of America, i.e. we all couldn't be farmer's. And in Hamilton's mind, strong financial institutions was a lesser evil that made this country into a strong independent nation.

Also, to quote your words, "there is no such thing as moral hazard nor malfesence." There is no such word as "malfesence." I'm sorry, but I have enough trouble with correctly spelled words, maybe you meant, "malfeasance."

Your friend,

famos

2008 Sep 01 01:56 PM

[notsosmart:]

lets stop worrying about spelling & begin to acknowledge that "greed" is the ever present danger to & within any financial system.how many people in our society have more money & assets but still spend time & energy to gain more? they claim its a game.how sad.

2008 Sep 01 03:30 PM

[a. palmer jr.:]

Like my wife says..how much is enough?

2008 Sep 01 04:52 PM

[sbenard:]

Wasn't Hamilton responsible for both the First and Second National Banks, both of which were economic catastrophes? The second one was the reason Andrew Jackson refused to renew its charter, considering it to be the single most important accomplishment of his presidency. In his will, Jackson wrote that on his gravestone were to be inscribed the words, "I killed the bank". I wish we had learned the lessons that he and Jefferson tried to teach us! We might not be headed for another economic catastrophe if we had!

2008 Sep 01 07:31 PM

[notsosmart:]

nobody learns anything.there will always be the scammers,skimmers, etc & sadly the fools who fall for the easy money tricks. if you cant think for yourself or are too lazy,just dont invest.put your money in cd's or mm accts.meager but safe returns.most work hard for their money.you have to work hard to make money work for you. navigating among the liars,scammers,skimmer... unethical ceo's & bod's,a poor excuse for a govt.,is tough.

2008 Sep 01 08:34 PM

[Brian A. Davis:]

Gentlemen,

Thank you for your thoughts and comments.
Please feel free to visit usmegatrends.blogspot.....
Steve Benard, if you are reading this I am interested in emailing you but your website does not list any contact info.
Respectfully,
Brian A. Davis

P.S. Sorry about the spelling error.
BD

2008 Sep 01 08:51 PM

[Kiisu:]

"Rule of law is an essential requirement for any civilization to thrive in the long term."

True, but only so long as it is obeyed.

If you read the US Constitution, then review current laws, judicial mandates, and Executive Orders, you'll quickly realize that the Constitution is in turned deliberately ignored, malevolently misinterpreted, and maliciously mangled.

The very folk who swear to “support and defend the Constitution of the United States against all enemies, foreign and domestic” are the very parties responsible for such malign behavior. For the last century, they have, almost without fail, violated every restriction imposed by the Constitution.

Furthermore, the redefinitions and circumlocutions provided as justification invert logic and foreshadow a more virulent strain of 1984 Orwellian Newspeak.

If the Judiciary, the Legislative and the Executive are the guardians of Constitutional Law, then who watches the guardians? Quis custodiet ipsos custodes? Who cures the malignancy festering in the heart of America?

And you wonder why we have a few problems?

2008 Sep 02 03:33 AM