The Establishment’s Love Affair With Hamilton
By Thomas DiLorenzo
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.
The establishment adores Hamilton (and hates Jefferson) because Hamilton was a consummate statist and imperialist. He persistently denounced his nemesis Jefferson for his “excessive concern for liberty.” When President Jefferson announced in his first inaugural address that his foreign policy would be “honest friendship with all nations, entangling alliances with none,” and that “A wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government . . .”, Hamilton denounced it as “the symptom of a pygmy mind.” Hamilton wanted a more centrally-planned and government-subsidized and supervised economy, and was itching to start a war with France in the name of what he called “imperial glory.”
When the constitutional convention quickly discarded Hamilton’s proposal of a permanent president (i.e., a king) who would appoint all the state governors who would have veto power over all state legislation, effectively destroying any semblance of federalism, Hamilton loudly denounced the Constitution as “a frail and worthless fabric.”
Hamilton’s objective was “to build the foundations of a new empire,” wrote Hamilton biographer Clinton Rossiter. Just like the British empire, against which the American Revolution had just been fought. Hamilton “had perhaps the highest respect for the government of any important American political thinker who ever lived,” wrote Rossiter. No wonder the government establishment has always been “in love” with Hamilton.
Hamilton was the founding father of constitutional subversion, having literally invented the “implied powers of the constitution” scam during his debate with Jefferson over the constitutionality of a national bank. (He was for it; Jefferson opposed it). Of course, once it is conceded that there might be “implied” as opposed to explicit, delegated powers of the federal government, you are on the road to unlimited government, which is the road that Hamilton favored. “With the aid of the doctrine of implied powers,” Clinton Rossiter boasted, Hamilton “converted the powers enumerated in Article 1, Section 8 into foundations for whatever prodigious feats of legislation any future Congress might contemplate.” The “living constitution” was born. No wonder the establishment loves Hamilton.
With such lawyerly subterfuge, Hamilton hoped to “affix a certain certificate of constitutionality to every last tax,” said Rossiter. “Hamilton took a large view of the power of Congress to tax because he took a large view of the power to spend.”
His view of the Constitution was the exact opposite of Jefferson’s. With Jefferson, the government should be “bound by the chains of the Constitution.” To Hamilton, the Constitution could and should be used as a rubber stamp on anything the federal government ever proposed to do. This, in fact, is the kind of Constitution that Americans have slaved under now for several generations.
Hamilton harbored the bloody impulse to literally murder tax dissenters and anyone who challenged the “authority” of the federal government, as was proven by his behavior during the Pennsylvania Whiskey Rebellion. This impulse would eventually become the defining characteristic of the federal government during the Lincoln regime, with Lincoln being the political son of Alexander Hamilton.
When Pennsylvania farmers began fermenting grain into whiskey and protested Treasury Secretary Hamilton’s new whiskey tax as discriminatory, Hamilton persuaded George Washington to ask governors along the eastern seaboard to conscript 15,000 men to march into Western Pennsylvania to quell the protest. They captured several dozen leaders of the tax protest movement and marched them across the state barefoot in the winter and put them on “trial” in Philadelphia, with Hamilton posing as the “judge.” Hamilton wanted to hang all of them to teach all other taxpayers a lesson, but George Washington introduced a dose of sanity to the whole affair by pardoning all of them, to Hamilton’s everlasting dismay. No wonder the establishment loves and adores Hamilton.
Hamilton was the political water boy for the crony capitalist one-percenters of his day. All of his efforts to create a bank run by politicians out of the nation’s capital (the First Bank of the United States) had one main purpose: to provide cheap credit for his big business political patrons in New York and Philadelphia, and to subsidize the banking industry itself, at the expense of the general public.
Hamilton was a protectionist who repeated all the silly slogans of the British mercantilists. He wanted to bring the rotten, corrupt, British system of “mercantilism,” against which the Revolution had been fought, to America, run by Americans like himself and his New York political cronies. He mocked the free-trade views of his British contemporary, Adam Smith, the French physiocrats, and almost all other economic scholars of his day as he advocated ripping off the common man for the benefit, once again, of his big business political patrons who wanted to be protected from international competition. (As John C. Calhoun once said, what the public is “protected” from with protectionism is low prices for goods).
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?