Author’s note: Donald Trump’s threat to fire Jerome Powell, head of the Federal Reserve Bank, and the governors of the regional banks, suggests that he would like to absorb the Fed under his watchful eye. This is not the first time the Republic’s method of governing the Nation’s economy has hit a snag, as the following essay demonstrates.
From the vault, July 17, 2019 (revised):
The United States of America has been the bastion of capitalism since the founding of the Republic. Capitalism drives every economic decision, both in the private sector and the public one; the capitalist prerogative – to make money by any and all means – is considered sacrosanct, and whoever dabbles in the economy ignores the prerogative at his own risk.
Historically, capitalism evolved from the mercantilism of the late Middle Ages and the early modern era. Mercantilism involved a group of persons who formed a trading company and bought shares in the activities of the company. If the trading of merchandise proved successful, the investors received a return on their investment according to the number of shares they had purchased. If the venture failed, however, they lost their money.
Capitalism differed from mercantilism in that (1) trading was replaced by manufacturing, (2) people invested in the business rather than the product, (3) a “stock market” was created to govern the cost of the shares purchased, and (4) the shareholders profited or lost according to the value of a “stock” at a given moment (the value of which was governed by external factors unrelated to the business). No one necessarily lost his entire investment. Generally, buying stock in a given business could be quite volatile, resulting in either a “bull market” (“booms”) or a “bear market” (“busts”).
Capitalism allegedly was inspired by the publishing in 1776 of Adam Smith’s The Wealth of Nations. The history of capitalism – both in the U.S. and the rest of the world – clearly suggested that, instead of being inspired by book, capitalists used Smith’s words as an excuse to make money without regard to the consequences of their actions. Smith was one of the seminal writers of the 18th-Century Enlightenment; but, whereas most of the writers of the day dealt with political science and law, he concentrated on economics. He spoke to the wealth of nations, not to the wealth of individuals as the capitalists claim; this meant public investments in the affairs of whole populaces so that all could share equally in the benefits of citizenship. Alexander Hamilton, the Republic’s first treasurer, was a true disciple of Adam Smith, and he endeavored to establish a National Bank to receive tax revenues, to pay the Nation’s bills, and to make public investments according to Smith’s views. He was thwarted almost at every turn as every capitalist opposed government’s telling them how they should make money.
The economic history of the United States has been a long series of unmitigated disasters. We have suffered from as many (if not more than) recessions/depressions as America’s military adventures. In point of fact, the economic history and the military history have gone hand in hand, the one either causing or following the other. Increasingly, the wars have been paid for by heavy borrowing which has enriched the capitalists immensely.
In The Chas’ humble opinion, capitalism is the worst economic system ever devised by the minds of men. It engenders greed and corruption on a massive scale, and it is diametrically opposed to democracy, i.e. the wealth of the few versus the wealth of the many. It is a monster which must be destroyed once and for all.
To this end, the Coddington Agenda suggests the following remedies:
•Restore the concept of the National Bank, make it the sole depository for all government revenues, the check-writer for the Nation’s bills, and the lender of choice for all public works;
•Democratize the Federal Reserve system and attach it to the National Bank;
•Replace the Securities and Exchange Commission (SEC) with a Federal Economic Planning and Development Commission whose purpose is to fund and oversee all public works;
•Abolish all stock markets, commodity and currency exchanges, and boards of trade;
•Make grants of taxpayer money for research dependent upon a detailed statement of the proposed use of the grant. Grants will terminate after one year, and renewal will depend upon a satisfactory report on the use of the grant. Failure to provide a satisfactory report will result in the non-renewing of the grant, and the grantee must wait one year to re-apply;
•Seize and sell the assets of any loan recipient which defaults on its National Bank loans, the selling price not to exceed the amount of the loan (plus costs of administration); and
•Create a Federal Home Loan Finance Office in the National Bank to serve those unable to afford a loan in the private sector.
Just a thought.