Problems and crises must be solved all the way to their roots, not superficially. Otherwise, they will recur with a vengeance. I do not see this being done in the present crisis. The two presidential candidates do not convince me that they really understand what is going on. The people who are telling us that they will solve the crisis are the representatives of the philosophy of government that is responsible for the occurrence of this crisis. They lack leadership qualities, because they watched the crisis brewing without seeing where it was going, and now that the crisis is in full bloom, their remedy is $700 Billion from the tax payers’ pocket. I think we have asked the fox to guard the chicken coop.It appears that the roots of the present economic crisis go all the way to the first years of our Republic, to the fights between Thomas Jefferson and Alexander Hamilton. They were fighting over the purpose of government, especially over economic policy. That fight has continued after them up to our day. [See:article by Thomas J. DiLorenzo titled “What Hamilton Has Wrought”] [His book “Hamilton’s Curse” will be published on Oct.21] Hamilton was an enthusiastic proponent of the corrupt British Mercantilist system, the very system the American Revolution was fought to avoid. He fought for his program of corporate welfare, protectionist tariffs, public debt, high taxation, and a central bank run by politicians and their appointees. He was the proponent of “Crony Capitalism” or a government run for the benefit of wealthy classes. Don’t we have the feeling that some one is talking about present day conditions?
Jefferson opposed him as strongly as he could, because Hamilton’s agenda would destroy liberty and because, he, Jefferson, was taking Adam Smith’s warning against economic interventionism very seriously.
Wile during the last two centuries, Americans talked and praised Adam Smith, in time the corrupt mercantilist system was spread in America in most aspects of our lives.
In our elections, we the citizens vote, but the election expenses of our representatives, senators and presidents are met mostly by corporations, who then command the loyalty of these representatives , senators, and presidents to these corporations. The result of this system is that the country is run not according to the wishes of the voters, but according to the needs of the corporations. This certainly is no democracy. During the Independence War (1919-1922) a Turkish parliament opened up in Ankara and one of the first articles of a new constitution that passed was “Sovereignty belongs unconditionally to the people” . Using this way of expressing, we should say that in the United States of America “Sovereignty belongs unconditionally to the corporations”. This system can be democratized by adopting pubic funded elections, and forbidding receiving any other monies, but our Congress wouldn’t vote for it. Corporations’ money is apparently too sweet. Public-funded elections would completely change the government. The representatives, the senators, and the presidents will start acting according to the wishes of the voters.
Hamilton wanted a big government to borrow money, to take higher taxes, and to spend freely, solely to sell government bonds to the affluent people (business people). Those who would hold these bonds would vote for him. Jefferson, to the contrary, advocated minimal government .
Wall Street financiers liked Hamilton’s idea and became the supporters of the Federalist Party, and eventually, of the Whigs and Republicans. The bonds between Wall Street and the Federal Government were strengthened, when Wall Street got to market government bonds. Hamilton wanted to unite the propertied interests of the Eastern Seaboard into an administration party. He also transformed the financial transactions of the Treasury Department into an orgy of graft in which selected politicians participated. The political descendent of these 18th Century “propertied interests” is the $700 Billion Bailout Bill of 2008.
Hamilton is also known as the Founding Father of Central Banking. According to William Graham Sumner, “a national bank was not essential to the work of the Federal Government.” Sumner believed that “The real purpose of Hamilton’s bank was the interweaving of the interests of wealthy men with those of the government.” The bank provided cheap credit to business supporters of the Federal Party, “attempting to engineer boom-and-bust cycles to influence elections” . It was a disaster for the general public. Once it created 72 % inflation. So the Central Bank was closed several times, but it survived. In 1913 the FED was created. “The Wall Street elite’s response to all this central-bank induced monetary instability was even more centralized banking with the creation of the Federal Reserve Board. It may have meant instability to ordinary citizens, but was the source of great riches to the banking industry and other members of the politically well-connected class. Sound familiar?”
I said at the beginning that “Problems and crises must be solved all the way to their roots. I have defined and described the roots: it is the government itself with its Central Bank. It seems to me that the government is not going to get rid of its central bank to solve the present crisis. Thus, the crisis will last many years., while the $700 billion will enrich many people who are the makers of the crisis. The only possibility of solution will start with the adoption of public funded elections and taking the hands of corporations from the steering wheel of the government. To make sure that such a crisis does not recur, we must erase all influence of mercantilism from our economy. That would make us also freer.
I have been in this country for 55 years and so far never heard that the Central Banks create on purpose economic cycles to influence elections, not until a few days ago, when I read the Article of Thomas J. DiLorenzo. If it is true, it would be a scandal of Gargantuan proportions. In 1958 when I was caught in one of these cycles and suffered for nine months, I was told that these cycles belong to the nature of the capitalist system. No one knew that it was created by the Central Bank, or what ever it was called at that time. Millions of Middle-class people suffered with me, and they too did not know the cause of their suffering. Why didn’t the media enlightened us? It is not possible that they did not know. How about the people we elected? Could they not know too?
Now that the DiLorenzo article put the story in the public arena, what will the Government do? I am very curious.