Monday, December 23, 2013

From The 'We've Been Here Before' Vault.....

'Abolish debt! Redistribute wealth!
Oh my God! They killed Kenny!'
Try to guess when, what and where the following time in America existed:
'Money problems pervaded all others. America was virtually bankrupt as the federal government and state governments found it impossible to retire the gargantuan debt inherited (from those who came before them). 'The fate of America was suspended by a hair', one noted financial expert was to say. (a)
Many Americans were as debt-ridden as their legislatures. Even as the government at the time proceeded, turmoil erupted as thousands of indebted businesses, farmers and individuals, struggling with soaring taxes and foreclosures on their property, marched in the streets, shut down courthouses and thwarted land seizures by force.
Massachusetts passed debt-relief legislation first. Many creditors and property owners were disturbed by the mounting power of government and dismayed by the impotent federal government.
An extremist movement in Rhode Island beat the drum for abolishing debt and dividing wealth equally. The Massachusetts uprising shocked many who wondered how far the rebellious movement would go. 'Good God!' exclaimed one of America's foremost leaders, aghast that some protesters regarded America's land and property 'to be the common property of all'.(b)
'They profess to aim only at a reform of the constitution and of certain abuses in the public administration, but an abolition of debts public and private and a new division of property are strongly suspected in contemplation' stated another prominent American leader.(c)*
Was it:

A) During the Great Depression when the Communist Party advanced in the US;
B) During the Obama 'Hope and Change' campaign of 2008;
C) During the first year of Ronald Reagan's Administration in 1981;
D) During the Panic of 1857; or
E) During 1787, before the US Constitution was written, ratified and in force?

The correct answer is E: 1787 during Shay's Rebellion. Gouverneur Morris said the first quote (a). None other than Gen'l George Washington said the second quote (b). James Madison, Father of the Constitution, uttered the words in quote (c).

So nothing is really ever new under the sun in American history, or human history, is it?

'Abolish all debts'. 'Share the wealth'. 'Divide up all property in the interest of 'fairness'. 

These concepts are not new to America. They existed before the United States even adopted the US Constitution, which is our second constitution, the weak-kneed Articles of Confederation being the first.

Just think about this for a moment: The fledgling independent confederation of US states, numbering 13 at the time (Quebec was invited to join but said 'non') had just recently fought the War for Independence and prevailed in 1781 over the world's most powerful land army and navy, Great Britain, and lost close to 25,000 people or 1% of the population to combat related deaths and diseases caused by wounds or in British prison.

America losing 1% of our population today would amount to 3.1 million people. 5 times more than we have lost in all of the wars in our nation's history combined.

Yet, despite all of that sacrifice for freedom, there were calls for abolition of debt, which would have destroyed America's credibility in the world financial markets before we even got started, and a redistribution of property, which would have defeated one of the reasons to rebel for freedom in the first place.

What is the point of bringing all this up right now?

American politics has always swung in a pendulum. President Obama was elected in 2008 in a period of mounting economic crisis and disfavor with a two-term president. He promised 'Hope and Change'.

He has certainly succeeded on the latter point. We are just not so sure it is ever going to be 'change for the better' for all of us, are we?

For those who are wringing your hands now saying 'Woe is Us!' (and 'ME' in particular!), we just want to point out that we have seen similar and far, far worse times in America than what we have seen in the last 5 years.

Does anyone seriously believe conditions in America today are worse than the following:

  1. The Civil War?
  2. The Great Depression? (which lasted 12 years)
  3. Any of the Panics of (name your year) 1785, 1792; 1819; 1837; 1857; 1873; 1893; 1907? 
  4. World War II?
  5. World War I?
  6. 9/11 and the ensuing 2 years of economic and physical fear?
  7. 'The Malaise Years' under Jimmy Carter from 1977-1981?
True, the prospects of a continued march down the road President Obama has set us upon 5 years ago do not seem to be bright. The first waves of the Obamacare tsunami are now breaking over the beachheads around the country. The damage and turmoil it has brought to the health insurance industry, the medical care facilities, corporate health plans and individual policy-holders is just starting to be felt in tangible ways by millions of Americans across the land.

We recently heard that the Obama Administration has suspended the individual mandate for people who had their individual plans canceled because of Obamacare....and now find that the plans to replace those canceled plans are 'too expensive', again because of Obamacare. 

'I'm gonna tie the health care system down to
the track...and watch it get run over!'
What is this, some kind of Keystone Kops movie or a dastardly plan by Snidely Whiplash to force us all into a national health plan when all private insurance plans collapse?

What we do know about Shay's Rebellion in 1787 is this: It represented a latent strand of populist DNA that flares up from time to time in American history, only to be pushed back and defeated for periods of times at length, usually when economic times improve and everyone is working again.

We think the election of Barack Obama in 2008 and 2012 represented a similar flare-up of the populist movement in American politics during similar uncertain economic times. His election, though, had far greater impact on the actual economic outlook of America than did Shay's Rebellion, although Col. Shays' rebellion caused many investors in Europe to dump American bonds in the belief the new young republic was not going to be able to govern itself in its freedom.

If you start to see foreign and domestic investors start to dump US bonds, and sell them for pennies on the dollar, you will know we have really hit rock bottom, contrary to anything Paul Krugman or any of the other apologists for the Obama Administration can cook up.

You don't want to live through such a scenario, we do know that.

If you want to help restore some sanity to the political process, consider running for office yourself. At the very minimum, get involved at the local and state level and give as much time, energy and money to candidates who support your opinion and general outlook on self-governance.

You can then say you actually were part of 'American History' and helped move the pendulum away from the Shay's Rebellion side of the dial.

* adapted from 'Alexander Hamilton' by Ron Chernow, pp.224-25, Chapter 'August and Respectable Assembly'

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