An Establishment Love Affair

When former Fed Chairman Ben Bernanke got wind of the fact that the U.S. Treasury Department was considering replacing Alexander Hamilton on the ten-dollar bill he threw a fit of protest.  Writing on his Brookings Institution blog, Bernanke said that he was “appalled” that “the greatest of the founding fathers” (and the founding father of central banking) would be mistreated in this way.

The New York Times immediately weighed in, apparently outraged that such a famous New Yorker would ever be demoted in such a way.  The neocons were especially incensed over the proposal.  After all, David Brooks of the New York Times has claimed that Hamilton single-handedly “created” American capitalism all by himself with help from no one, not even God Himself.

Pat Buchanan, who once said to me that “Hamilton is my hero,” must have lost a lot of sleep over it as well.  Around the same time, New Yorkers began flocking to a new Broadway musical named “Hamilton” that repeats the old statist tale about how allegedly wonderful the statist/imperialist Hamilton was compared to the strict constructionist, “that government is best which governs least,” Thomas Jefferson.

As though that weren’t enough pandering for the benefit of the founding one percenters, Hamilton also championed direct corporate welfare in the form of taxpayer subsidies for all kinds of businesses and industries in his famous Report on Manufactures.  It was called the “infant industry argument” for corporate welfare, but of course, because America was a young country, ALL industries could be labeled “infant” industries!  He just did not believe that commerce could succeed without his guiding hand.

Hamilton championed the biggest corporate welfare subsidies for the road- and canal-building corporations even though thousands of miles of roads had been built by private companies with private capital by the early 1800s.  Just in case tax revenues weren’t enough to cover all these blatantly unconstitutional expenditures that appear nowhere in Article 1, Section 8 of the Constitution, Hamilton waxed eloquently about how the public debt could be “a public blessing.”

Hamilton’s argument for the “blessing” of a large public debt was quite Machiavellian.  His theory was that because the wealthier people of the country would be the owners of the debt (i.e., government bonds), they would form a formidable lobbying power for higher taxes and bigger and more centralized government to assure that their bonds would always be paid off.  As William Graham Sumner wrote in his biography of Hamilton, he wanted a large national debt because of “its tendency to strengthen our . . . government by increasing the number of ligaments between the government and interests of individuals.”  Rich and politically-influential individuals, that is.  And as Douglas Adair, an editor of The Federalist Papers, wrote in the introduction to one edition of the publication:

With devious brilliance, Hamilton set out, by a program of class   legislation, to unite the propertied interests of the eastern seaboard into a cohesive administration party, while at the same time he attempted to make the executive dominant over the Congress by a lavish use of the spoils system . . . .  Hamilton transformed every financial transaction of the Treasury Department into an orgy of speculation and graft in which selected senators, congressmen, and certain of their richer constituents throughout the nation participated.

Is there any wonder why the “establishment” of “senators, congressmen, and richer constituents throughout the nation” today are so worshipful of Hamilton and so relieved that his mug shot remains on the ten-dollar bill?

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