Wednesday, November 19, 2008
Hamilton's Curse and the Death of the Dollar Standard
Dick Cheney wasn't the first Vice President to shoot somebody: Aaron Burr is depicted here shooting and mortally wounding Alexander Hamilton during their 1804 duel in Weehawken, New Jersey, an "affair of honor" that came a couple of decades too late to save America from a lot of economic misery.
Recalling the death of Alexander Hamilton at the hands of Aaron Burr, one is inevitably prompted to borrow the line from Shakespeare's Scottish Play: "Nothing in his life became him like the leaving it."
After examining the legacy of the first U.S. Treasury Secretary in Thomas DiLorenzo's timely and indispensable new book Hamilton's Curse, one might be forgiven for wishing the deadly round fired by Burr's pistol during the 1804 duel at Weehawken had found its target two decades earlier, or that Hamilton -- who displayed genuine valor as an artillery officer in the War for American Independence -- had died heroically on the battlefield before laying the foundations of the corporatist system under which we now live.
A worshipful biography of Hamilton published several decades ago bore the title To Covet Honor, a phrase used by the author without irony.
The line from which that title was taken -- "If it be a sin to covet honor, I am the most offending soul alive" -- was uttered by Henry V on the eve of a battle in a war waged in the cruelest fashion on the thinnest of pretexts.
Understood in its context, rather than in the heroic light in which that author hoped to bathe his subject, that phrase actually reflects some elements of Hamilton's personality and ambitions that led him to betray the American Revolution.
Hamilton, as is widely known, favored a highly centralized government, a near-dictatorial executive, and a mercantilist/corporatist economic system. As DiLorenzo points out (and as we'll see anon), in the pursuit of his nationalist designs Hamilton had no compunctions about using what Exeter, King Henry's royal emissary who delivered an ultimatum to the French, called "bloody constraint" against his countrymen who preferred freedom to Hamilton's concept of "greatness."
Indeed, Hamilton's notion of "honor" obtained through bloodshed and coercion wasn't that different from that of Prince Hal, the "vain, giddy, shallow, humorous youth" who sought to vindicate his kingly stature by waging the first war his advisors could contrive.
As depicted by The Bard, Henry -- the "mirror of Christian kings," a line Shakespeare almost certainly imbued with bitter irony -- broke the siege of Harfleur, a town he called "guilty in defense" for resisting the English invaders -- by threatening to authorize his soldiers to rape young girls, massacre frail old men, and skewer squalling infants on pikes, "Whiles the made mothers with their howls confus'd, Do break the clouds, as did the wives of Jewry At Herod's bloody-hunting slaughtermen...."
The same King Henry willing to unleash officially sanctioned infanticide later hanged a soldier -- a former carousing buddy -- for stealing a trinket without royal permission. The same king who was given to self-pitying soliloquies about the burdens of his office ("What infinite heart's ease must kings neglect that private men enjoy.... What kind of god art thou, that suffer'st more Of mortal griefs than do thy worshippers?") ordered the summary execution of helpless prisoners, a war crime that earned not the respect but rather the contempt of the over-matched French.
Since I'm an individualist of the Jeffersonian tradition, I've long held Hamilton in qualified contempt, a sentiment tempered by my respect for Hamilton's role in crafting Washington's Farewell Address, and some elements of his arguments offered behind the pseudonym Pacificus during the debate over U.S. neutrality in the conflict between England and France. (Both Hamilton and Washington were right about neutrality, and wrong about the power of the president to issue a neutrality decree that had the force of law; Washington, of course, was humble enough to admit his mistake.)
DiLorenzo's book documents that Hamilton, despite his legitimate heroism in the cause of Independence, may have had the most pernicious influence of any political figure in our nation's history.
Nearly all of the salient traits of the modern Leviathan State headquartered in Washington -- the imperial presidency, judicial activism, the Federal Reserve System's institutionalized counterfeiting and fraud, the ever-metastasizing government debt, the ever-expanding ranks of tax-subsidized corporate welfare parasites, the reduction of the states to docile administrative units of a unitary regime -- were inspired by, and are the fulfillment of, Hamilton's designs.
Hamilton once complained of "an excessive concern for liberty in public men," a swipe at Jefferson and other freedom zealots who placed individual rights and dignity above considerations of "national greatness." Hamilton's designs were unabashedly imperial. They required that the central government absorb the powers of all other political and social entities, and that the president enjoy unqualified discretion in using those powers to build and perpetuate a strong and expanding state.
To that end, notes DiLorenzo, Hamilton devised a scheme to wed the central government with the super-wealthy. A growing state is sustained by debt, and this meant expanding the ranks of government bondholders and tending to their needs. This meant ensuring a steady stream of revenue into the government's coffers and into the accounts of bondholders.
Hamilton thus sought to "tie the wealthy of the country (who would be primary purchasers of government bonds) to the government, thereby creating a formidable political pressure group in favor of bigger government and higher taxation."
Obviously, this was before the advent of the fiat money system under the Federal Reserve System, whose managers gratefully acknowledge Hamilton as their intellectual ancestor. In today's version of the Hamiltonian corporatist system, DiLorenzo notes, politically connected business interests consistently agitate on behalf of both a larger direct tax burden and expanded government spending financed through monetary inflation.
Hamilton's vision of a unitary state with unlimited powers was not the union of "free and independent states" for which the American Patriots had fought. Instead, the vision that caused Hamilton's pulse to race and loins to stir was that of "a United States woven together by a system of tax collectors," as James Madison sardonically observed.
Up the rebels! The Whiskey Rebels of western Pennsylvania, that is. At left: The Whiskey Rebel flag. Below right: Rebels introduce a tax collector to the latest fashions in tar-and-feather couture. Sic semper tyrannis!
It was in the service of that vision that Hamilton afflicted Americans with various excise taxes, and then abetted the invasion of western Pennsylvania in the first use of military power by the central government against Americans -- the campaign to suppress the Whiskey Rebellion.
Farmers in western Pennsylvania, who used whiskey as an instrument of barter, heroically refused to pay Hamilton's excise tax, and quite commendably introduced the officials sent to collect it to the decorative uses of hot tar and goose feathers. This uprising was squarely in the hallowed and admirable tradition of patriotic anti-government radicalism that had precipitated the War for Independence.
But where King George III failed to exterminate American radicalism, Hamilton -- through his influence with Washington, and his entente with the eastern seaboard mercantilist elite -- was successful.
Washington's decision to assemble and lead an army of 13,000 conscripts to overawe the Whiskey Rebels is the largest stain on his noble biography. It also laid bare the malignant ambition that resided in Hamilton's breast, and the corruption that festered even then at the heart of the corporatocracy he devised.
Notes DiLorenzo: "The rank-and-file soldiers [in the army assembled by Washington] may have been mostly conscripts, but many of the officers who accompanied Hamilton and Washington to Pennsylvania were `from the ranks of the creditor aristocracy in the seaboard cities.... These officers were eager to enforce collection of the whiskey tax so that the value of their government bond holdings could be enhanced and secured."
The punitive expedition against the Whiskey Rebels illustrated "why Hamilton was such a vociferous proponent of a standing army," writes DiLorenzo. "He wanted a standing army of tax collectors. This is how King George III collected stamp taxes and other levies from the American colonists prior to the Revolution, and it is how Hamilton intended to collect his whiskey tax" and any other impositions he could devise.
The new "sovereign" asserts itself: Washington, urged on by Hamilton, assembles an army to put down the Whiskey Rebellion.
So it was that, thirteen years after Yorktown, Hamilton and Washington deployed an army larger than the one that defeated the British in that climactic battle in order to validate the central government's power to shake down the poor and the entrepreneurial class on behalf of wealthy, well-connected political clients.
And Hamilton's treatment of captured American tax rebels displayed an imperious cruelty eclipsing that displayed by the Brits toward American P.O.W.s.
As DiLorenzo recounts, Hamilton's army "treated their captives -- including `old men who had fought for American independence ... some pale and sick' -- most inhumanely. The tax protesters were `run through the snow in chains, toward various lockups in town jails, stables, and cattle pens, to await interrogation by Hamilton.' This went on all the way across the state of Pennsylvania, until they reached Philadelphia."
Washington, whose heart was never really in this expedition, made the mistake of leaving Hamilton (of whom he entertained much too high an opinion) in charge, and unsupervised.
This permitted him, in DiLorenzo's words, to play "the role of Grand Inquisitor," in which he, as if in anticipation of Gitmo-era proceedings, "`prompted detainees to manufacture evidence' against his political opponents from Pennsylvania. One of his assistants, a General White, `ordered the beheading of anyone attempting to escape' and was not overruled by the treasury secretary, who was apparently willing to play judge, jury, and executioner. Indeed, Hamilton ordered local judges to render guilty verdicts against the twenty men who were eventually imprisoned, and he wanted all guilty parties to be hanged."
Due in no small measure to Washington's influence, Hamilton's crusade never reached that bloody fruition. Twelve rebels were prosecuted; two were convicted, and pardoned by Washington. None of them ever paid the abhorrent whiskey tax. This was perhaps the last significant victory against Hamilton's system.
After his death in 1804, Hamilton's disciples would succeed -- briefly -- in creating a central Bank of the United States. A generation later, an otherwise undistinguished Illinois lawyer who made himself wealthy in the service of the Hamiltonian railroad combine would wage a war of consolidation against the South in order to preserve the tax revenues that were indispensable to the corporatist system. That was indeed the causus belli for Lincoln's war to prevent southern independence, even though the Regime demands that we perceive it to be a sacred crusade to liberate enslaved black people, rather than a conflict intended to make tax slaves out of everybody.
Hamilton's system reached its full, malignant maturity in 1913 under the unspeakably vile Woodrow Wilson, the presidential sock-puppet of "Colonel" Edward Mandell House -- who was himself the instrument of the same creditor class Hamilton had served so faithfully. That year brought about the imposition of the income tax, the creation of the Federal Reserve System, and the effective abolition of the United States Senate (originally designed to protect the interests of the separate states) via the Seventeenth Amendment.
Since that time, Americans have lived under a unitary state fueled by taxation, debt, and inflation, in which the earnings of the middle class are plundered for the benefit of corporate welfare whores. Those living today enjoy the unique, albeit unsettling, blessing of watching the death throes of Hamilton's system, or at least the post-1971 version of the same.
From Herr Henreich Paulson, the heir to Hamilton's throne, we hear the same kind of self-contradictory persiflage that littered the various "Reports" Hamilton wrote on behalf of his mercantilist designs. As trillions of dollars are created by the Fed to slop the troughs of Wall Street speculators and their creditors, we are seeing Hamiltonian governance in its purity: The unblushing transfer of wealth from productive private interests into the hands of the politically favored elite.
Monsters immortalized: Bank robber-turned-secret police founder Felix Dzerzhinsky, father of the KGB, depicted in a statue outside Moscow's Lubyanka Square. Below, right: Alexander Hamilton, who devised schemes to rob people through the banks, as idealized in a statue outside the Treasury Department Building.
Just as the statue of Felix Dzerzhinsky, founder of the Soviet KGB, still stands outside the Lubyanka Square headquarters of the "post-Soviet" secret police, Hamilton's marble likeness resides in front of the Treasury Department Building, headquarters of the agency that oversees our own three-letter terrorist organ, the IRS.
And the abiding cult of the imperial presidency attests to Hamilton's success in refashioning what was intended to be a modest executive office into a fully realized elected dictatorship.
The unfolding economic collapse is nothing less than an extinction-level event for the dollar system devised by Hamilton. I have no idea what will replace the dollar as the world's reserve currency, but the greenback will lose that status very soon -- most likely sooner than most of us would suspect.
When that happens, the brutality encoded in the Hamiltonian State's genotype -- recall the forced marches of elderly tax rebels through the snows of Pennsylvania, the coerced confessions and accusations, the threats of beheadings and summary hangings -- will manifest itself quite forcefully as it seeks to extract the means of paying its bondholders.
Wisdom dictates that we preserve what we've earned by withdrawing from the dollar system (to the extent that we can), learn how to protect it and those close to us from predators both private and public, and find suitable refuge as we witness the death throes of the existing order.
And in preparation for the Second American Revolution, we should read and re-read Thomas DiLorenzo's enlightening and elegantly written indictment in order to understand how the first one was betrayed.
Want to know more about the Hamiltonian Homeland Security State?
Check it out.
Dum spiro, pugno!