|America's Emerging Liberal Oligarchy||The Difference Between Change and Reform|
by Christopher Chantrill
February 19, 2009 at 5:56 pm
LAST WEEK our noble solons lined up a bunch of bank CEOs and proceeded to lash themselves into a lather. All hands aft to witness punishment, as they say in naval fiction.
Im sorry, Mr. Congressman. I dont get it. I thought the whole point of government grants and bailouts and stimulus was to spray money around for people to spend. So whats the problem if the bankers take you at your word?
Lets get some clarity here. Banking is a government program, the means by which the government control the credit system. Bankers are the governments toadies.
Mainly, governments like to control the credit system because they need money for wars. The banking granddaddy of them all, the Bank of England, got its start because the British government needed someone in 1692 to sell its bonds so it could fight a war. Thus was born the British National Debt. Youd expect ukpublicspending.co.uk to have a handy chart on this, and it does.
In the 18th century the British government used all that borrowed money to conquer the world. Then, in the long 19th century, they paid the National Debt back and built an industrial empire on the proceeds until it was time to Hang the Kaiser and defeat the Nazis.
By and large through all this the Bank of England did a pretty good job, at least until World War II.
In the United States the government has consistently screwed up the credit system, almost from the very beginning. Viewed in this light the Federal Reserve Boards slam-bang on-off monetary policy of the last ten years is nothing new. The US government has never had a clue when it came to regulating credit conditions.
In its early years the US couldnt decide whether it wanted a central bank. Treasury Secretary Alexander Hamilton pushed through the First Bank of the United States in 1791 and nationalized the debts of the revolutionary war, but Congress refused to renew the banks charter in 1811. With exquisite timing the United States found itself without a central bank to fight the War of 1812.
Still, the United States managed to pay off its National Debt by the 1840s as this chart from usgovernmentspending.com illustrates.
The Second Bank of the United States was chartered in 1815 but closed by President Andrew Jackson in 1837. Jackson also stopped a big land boom dead in its tracks with his Specie Circular of 1836. His action required that all payments for government land be made in gold or silver. The speculators ran for the hills in the Panic of 1837 and the money supply fell by about 35 percent. We are talking about a five-year depression.
Next up was the Civil War. It was financed in part by printing money and in part by hundred of millions of government bonds sold by Jay Cooke. But after the war the government turned to deflation to restore the value of the dollar. When it decided to demonetize silver it set off the Panic of 1873 and a sharp contraction in credit. The following years came to be called the Long Depression.
They were certainly deflationary. But with the passage of the Sherman Silver Purchase Act in 1890 the government swung back to an inflationary stance. The economy boomed for a while until people started trading in their silver certificates for gold. That set off the Panic of 1893.
Thank goodness the US had a banker like J. Pierpont Morgan who could bail out the US government in 1895 when it almost ran out of gold and halt the Panic of 1907 with a triage committee of the wealthiest men in New York City.
After Morgan saved the economy everyone agreed that the US needed a credit system without the taint of Morgan and his money trust. So we got the Federal Reserve and the Great Depression of the 1930s.
To heal the credit system in the 1930s the government had to devalue the dollar from $20.75 per ounce to $35. In the 1970s the government went off the gold exchange standard and floated the dollar eventually down to $800 per ounce in the nadir of the Carter malaise of 1979-80. In the early 1980s Ronald Reagan and Paul Volcker brought the dollar back, but new smash-ups from government credit wheezes like the Savings and Loan collapse of 1989 and the Fannie-Freddie meltdown of 2008 have reduced the credit system to a pulp. We dont yet know what it will take to get the credit system off the rocks in 2009.
If you were a banker, what would you do right about now? Exactly. Youd pay yourself a big bonus and head for the hills.
Lets have a witch-hunt and nationalize the banks. Thats the way to teach them a lesson.
Buy his Road to the Middle Class.
[The Axial Age] highlights the conception of a responsible self... [that] promise[s] man for the first time that he can understand the fundamental structure of reality and through salvation participate actively in it.
Robert N Bellah, "Religious Evolution", American Sociological Review, Vol. 29, No. 3.
[To make] of each individual member of the army a soldier who, in character, capability, and knowledge, is self-reliant, self-confident, dedicated, and joyful in taking responsibility [verantwortungsfreudig] as a man and a soldier. — Gen. Hans von Seeckt
MacGregor Knox, Williamson Murray, ed., The dynamics of military revolution, 1300-2050
Civil Societya complex welter of intermediate institutions, including businesses, voluntary associations, educational institutions, clubs, unions, media, charities, and churchesbuilds, in turn, on the family, the primary instrument by which people are socialized into their culture and given the skills that allow them to live in broader society and through which the values and knowledge of that society are transmitted across the generations.
Francis Fukuyama, Trust
[W]hen I asked a liberal longtime editor I know with a mainstream [publishing] house for a candid, shorthand version of the assumptions she and her colleagues make about conservatives, she didn't hesitate. Racist, sexist, homophobic, anti-choice fascists, she offered, smiling but meaning it.
Harry Stein, I Can't Believe I'm Sitting Next to a Republican
[T]he Liberal, and still more the subspecies Radical... more than any other in these latter days seems under the impression that so long as he has a good end in view he is warranted in exercising over men all the coercion he is able[.]
Herbert Spencer, The Man Versus the State
These emerge out of long-standing moral notions of freedom, benevolence, and the affirmation of ordinary life... I have been sketching a schematic map... [of] the moral sources [of these notions]... the original theistic grounding for these standards... a naturalism of disengaged reason, which in our day takes scientistic forms, and a third family of views which finds its sources in Romantic expressivism, or in one of the modernist successor visions.
Charles Taylor, Sources of the Self
Families helped each other putting up homes and barns. Together, they built churches, schools, and common civic buildings. They collaborated to build roads and bridges. They took pride in being free persons, independent, and self-reliant; but the texture of their lives was cooperative and fraternal.
Michael Novak, The Spirit of Democratic Capitalism
For [the left] there is only the state and the individual, nothing in between. No family to rely on, no friend to depend on, no community to call on. No neighbourhood to grow in, no faith to share in, no charities to work in. No-one but the Minister, nowhere but Whitehall, no such thing as society - just them, and their laws, and their rules, and their arrogance.
David Cameron, Conference Speech 2008
As far as the Catholic Church is concerned, the principal focus of her interventions in the public arena is the protection and promotion of the dignity of the person, and she is thereby consciously drawing particular attention to principles which are not negotiable...
[1.] protection of life in all its stages, from the first moment of conception until natural death; [2.] recognition and promotion of the natural structure of the family... [3.] the protection of the right of parents to educate their children.
Pope Benedict XVI, Speech to European Peoples Party, 2006
No lesson seems to be so deeply inculcated by the experience of life as that you should never trust experts. If you believe doctors, nothing is wholesome: if you believe the theologians, nothing is innocent: if you believe the soldiers, nothing is safe. They all require their strong wine diluted by a very large admixture of insipid common sense.
Lord Salisbury, Letter to Lord Lytton
What distinguishes true Conservatism from the rest, and from the Blair project, is the belief in more personal freedom and more market freedom, along with less state intervention... The true Third Way is the Holy Grail of Tory politics today - compassion and community without compulsion.
Minette Marrin, The Daily Telegraph
In England there were always two sharply opposed middle classes, the academic middle class and the commercial middle class. In the nineteenth century, the academic middle class won the battle for power and status... Then came the triumph of Margaret Thatcher... The academics lost their power and prestige and... have been gloomy ever since.
Freeman Dyson, The Scientist as Rebel