Conservative Hypocrisy Goes Back To America's Beginning
Summary
TLDRThe transcript explores the early ideological and material conflicts shaping the United States, focusing on the continentalists and state sovereigntists, and their evolving perspectives on democracy and taxation. It delves into the dynamic between Hamilton, Madison, and Jefferson, highlighting the complex interplay of political interests, material stakes, and constitutional interpretations. The discussion also touches on the legacy of Hamilton's policies, their influence on modern financial crises, and the debate over the role of finance in society.
Takeaways
- đïž The script discusses the early political dynamics in the United States, highlighting the continentalists, state sovereigntists, and the concept of democracy as the three main forces shaping the country's future.
- đ The Continental Congress was not a national government but a representative body acting indirectly through state legislatures, reflecting the initial lack of consensus on a national government structure.
- đ Key figures like Hamilton, Washington, and Madison had differing views on the extent of national government power, with some advocating for a stronger national government (continentalism) and others for state sovereignty.
- đ€ The script points out that the conflict between the continentalists and state sovereigntists later evolved into the Federalists versus Anti-Federalists debate, and eventually into the Hamiltonians versus Jeffersonians.
- đ It emphasizes the complexity of the political landscape, suggesting that there were not just two but three forces at play, including a third force representing the majority of the free population, which was often overlooked.
- đĄ The discussion suggests that early on, the country's politics were more about material stakes than ideological differences, although significant ideological debates did emerge over time.
- đŒ The script touches on the ideological and material interests intertwined in the political decisions of the time, such as the establishment of a national bank and its constitutionality.
- đ It mentions how figures like James Madison and Albert Gallatin navigated the political and ideological landscape, sometimes changing positions based on evolving political circumstances.
- đ The Hamilton musical is noted as a recent cultural phenomenon that has contributed to a resurgence of interest in Alexander Hamilton's legacy, but it was part of a longer trend of re-evaluating his influence.
- đŠ The script reflects on Hamilton's legacy in modern policy, particularly in financial policy and crisis management, where his approach to bailouts and financial systems has been influential.
- đ The final takeaway is a reflection on the role of finance in society, questioning whether it should be an end in itself or a means to improve the lives of ordinary people.
Q & A
What are the three forces discussed in the script that shaped the early United States?
-The three forces are the Continentalists, the State Sovereigntists, and the democratic movement represented by the rebellions and the idea that those with rights should contribute more in terms of taxes.
What was the role of the Continental Congress during the American Revolution?
-The Continental Congress was a representative government representing state legislatures, not individuals. It acted on people indirectly through the state legislatures and was not a national government operating on all citizens throughout the country.
Who were some of the key figures associated with the Continentalist view during the early period of the United States?
-Key figures included Alexander Hamilton, George Washington, Philip Schuyler, John Jay, and initially, James Madison.
What was the conflict between the governing elite that later became known as the Federalists versus the Anti-Federalists?
-The conflict was centered around whether to establish a national government or maintain state sovereignty. Those who wanted a national government became the Federalists, while those who opposed it were the Anti-Federalists.
How did the dynamic between the Continentalists and the State Sovereigntists evolve over time?
-The dynamic evolved into the Federalists versus the Anti-Federalists, and later, it was sometimes seen as the Jeffersonians versus the Hamiltonians, reflecting the ideological and political shifts of the time.
What was the significance of the debate over the establishment of a national bank in the early United States?
-The debate was significant as it represented a fundamental ideological conflict between those who believed in a strong central bank as a means to achieve national fiscal stability (Hamiltonians) and those who saw it as unconstitutional and a threat to state interests (Jeffersonians and Anti-Federalists).
How did James Madison's stance on the national bank change over time?
-Initially, Madison worked with Hamilton on the Constitution, but later, when Hamilton became Treasury Secretary, Madison opposed the national bank, arguing it was unconstitutional. However, when Madison became president, he supported rechartering the bank, indicating a shift in his views.
What role did Albert Gallatin play in the Jeffersonian administration?
-Albert Gallatin served as Treasury Secretary for both Thomas Jefferson and James Madison. He was tasked with dismantling Hamilton's financial system but found that it was necessary for the stability of the country and instead worked to reduce the public debt.
How did the Hamiltonian approach to finance influence later administrations, even up to the financial crisis of 2008?
-The Hamiltonian approach, which emphasized the importance of a strong financial system, influenced later administrations by providing a model for handling financial crises. During the 2008 crisis, the outgoing Bush and incoming Obama administrations looked to Hamilton's example for guidance on bailout strategies.
What is the current perception of Hamilton's legacy in policy circles and government?
-Hamilton's legacy is seen positively in policy circles and government, particularly for his innovative financial policies and his role in establishing the foundation of the American financial system.
What was the ideological basis for the debate over the federal government's role in the financial crisis of 2008?
-The ideological basis for the debate centered on whether the federal government should prioritize bailing out financial institutions to stabilize the economy or focus on helping individual homeowners directly, reflecting a broader debate about the role of government and finance in society.
Outlines
đ Conflicting Visions for America's Future
The first paragraph delves into the early ideological and political struggles that shaped the United States. It outlines the three main forces at play: the continentalists, the state sovereigntists, and the democratic movement. The continentalists, including figures like Hamilton and Washington, advocated for a strong national government, while the state sovereigntists opposed this, fearing a loss of state powers. The democratic movement, representing the interests of the property-owning class, sought fair taxation in line with their rights. The paragraph discusses the lack of consensus in the Continental Congress and the evolution of these factions into the Federalists versus the Anti-Federalists, and later the Jeffersonians versus the Hamiltonians. It emphasizes the complexity of the situation, suggesting that material interests often intertwined with ideological ones, as exemplified by the conflict over the establishment of a national bank.
đ€ The Debate Over the National Bank
This paragraph focuses on the debate surrounding the establishment of a federal central bank, a key point of contention between Hamilton and Madison. Hamilton argued for the bank as a constitutional necessity to fulfill the government's financial duties, while Madison, influenced by his political shift and representing Virginia's interests, opposed it as unconstitutional, invoking the principle that any power not explicitly enumerated is prohibited. The discussion highlights the intertwining of political, material, and ideological interests, with Madison's stance reflecting both a constitutional argument and the material interests of his constituents. The paragraph also touches on the evolution of Madison's views and the broader implications of the debate for the interpretation of the Constitution and the limits of federal power.
đïž Gallatin's Struggle with Jeffersonian Ideals
The third paragraph discusses Albert Gallatin's role as Treasury Secretary under both Jefferson and Madison. Initially tasked with dismantling Hamilton's financial system, Gallatin recognized the importance of maintaining stability and worked to gradually reduce the public debt. His approach was a pragmatic balance between Jeffersonian ideology and the practical necessities of governance, especially in the face of the Louisiana Purchase and subsequent wars. Despite his efforts, Gallatin faced opposition from his own party, the Republicans, who favored war expenditures without corresponding taxes, reflecting a tension between ideological purity and political reality.
đ Hamilton's Legacy and Modern Financial Policy
The final paragraph reflects on Hamilton's enduring legacy, particularly in the realm of financial policy. It notes a resurgence of interest in Hamilton's ideas in the 1990s and early 2000s, with figures from the Clinton to the Obama administrations looking to Hamilton as a model for financial system management, especially during the 2008 financial crisis. The discussion raises questions about the prioritization of financial institutions over individual homeowners in bailouts, suggesting a bias towards preserving the financial system at the expense of ordinary citizens. It contrasts this approach with FDR's policies and hints at a potential disconnect between the veneration of finance and the actual needs of the people.
Mindmap
Keywords
đĄContinentalists
đĄState Sovereigntist
đĄDemocracy
đĄRebellions
đĄTaxation
đĄFederalists
đĄAnti-Federalists
đĄHamiltonian
đĄJeffersonian
đĄAlbert Gallatin
đĄFinancial Crisis of 2008
Highlights
Discussion of the three forces shaping the country: continentalists, state sovereigntists, and democracy.
Clarification on the roles and differences between continentalists and state sovereigntists in early Congress.
Hamilton's vision of a national government and the opposition to it from those valuing state powers.
The emergence of Federalists versus Anti-Federalists from the governing elite's conflict.
James Madison's ideological shift against Hamilton and the debate over the constitutionality of a national bank.
The intertwining of material interests and ideology in the formation of political stances.
Madison's constitutional theory that unenumerated powers are unconstitutional, a stance still relevant today.
The transformation of Anti-Federalist ideology from fearing an overpowered government to advocating for limited federal powers.
Albert Gallatin's role in attempting to dismantle Hamilton's policies while maintaining fiscal responsibility.
Gallatin's approach to reducing public debt with discipline and patience.
Jefferson's Louisiana Purchase and the financial challenges it presented, contrasting with his anti-tax stance.
Gallatin's tragic end where his own party turned against him, illustrating the complexities of political alignments.
Hamilton's legacy in policy circles and its resurgence in the 1990s and 2000s.
The influence of Hamilton on financial policy during the 2008 crisis and the debate over bailout strategies.
Critique of the financial system's prioritization and its impact on policy decisions.
Comparison of Hamilton's approach to FDR's during financial crises, highlighting different priorities.
The Democratic Party's shift away from FDR's policies and its embrace of Wall Street and big banking.
Discussion on the book 'The Hamilton Scheme' and the newsletter 'Hugin's Bad History' for further reading.
Transcripts
when you break down the sort of like
three I think you you you sort of
outlined three sort of like uh forces
that are working to to shape this uh to
shape what the country is ultimately
going to become the the continentalists
the state sovereigntist and and then
just sort of like the idea of democracy
and if democracy is represented by like
what we see in these rebellions uh and
this sort of burgeoning movement of like
hey um the people who have all the
rights maybe they should be paying a
little bit more in in terms of taxes um
and and they have these rights obviously
because of their property and whatnot um
what what just I'm a little bit unclear
in the continentalists versus the state
sovereigntist what is what's the dynamic
there and who who represents that well
early on you know in the Continental
Congress During the Revolution uh it
wasn't it wasn't clear at all it wasn't
a majority opinion necessarily at all or
a consensus opinion I guess I should say
that um that the country was being that
the country was going to become a n have
a national government the Continental
Congress really was not a national
government it was a represent
representative government representing
State legislatures not people um so it
acted on people indirectly through the
state legislatures but it was not a
national government operating again on
all citizens throughout the country
Hamilton wanted that and he called it
continentalism and he was by no means
alone Washington wanted it his his
father Hamilton's father-in-law Skyler
wanted it John Jay uh James Madison at
that time was on Hamilton's side there
were a lot of people who wanted it um
and then there were a lot of people who
thought no we we're fighting we're
fighting Britain because they violated
our state legislator's Powers why would
we give up those Powers now to a
national government So within the
governing Elite you have this absolute
conflict which later on becomes kind of
like the Federalists versus the
Anti-Federalists and after that it
becomes and you know sometimes it's seen
as the jeffersonians versus the
hamiltonians um and then I'm saying and
we frequently we look at the whole
country's history and sort of the
psychology of the country and we say oh
it's basically Hamilton versus Jefferson
that's been our sort of dilemma
throughout the history hamiltonians
versus jeffersonians I'm kind of saying
yeah there's that but there's this third
force that nobody wants to talk about
which represents the majority of free
nebor in people in the country uh maybe
you might call it the white working
class of the day that movement I was
just talking about um which actually
obsessed Hamilton and compelled his
attention because he wanted to crush it
so I'm really trying to say it's not a
binary there's really three forces
there's two forces in the governing
Elite that are at each other's throats
and then there's a third force that they
each of those two governing Elite forces
have a kind of a funky relationship with
and that's kind of what I'm tracing do
those two forces within the elite do
they have have a different ideological
perspective or are all three on some
level these are this is just a when you
when when you're at the beginning of a
country is it far more uh fights between
sort of like material Stakes uh than
some type of ideological ones that's a
really key you know issue I mean yes
there was ideological difference
certainly among the continentalists and
state sovereigntist points of view the
people who became the Federalists and
the Anti-Federalists
um the jeffersonians and the
hamiltonians major
ideological um
differences but it's also interesting to
look at like when say James Madison
breaks with Hamilton goes up against him
uh once Hamilton is treasury secretary
uh they've they've worked together on
bringing about the Constitution but then
they break up and it's pretty it's
pretty painful um and Madison goes after
the central bank or the National Bank I
should call it that Hamilton feel is
critically important to Bringing about
all the things that he got into he he
thought were important about the
Constitution Madison calls it
unconstitutional that's an ideological
argument I mean it's it's it's
fundamental it's like it's not just
Madison's not saying I hate banking he's
saying it's unconstitutional for there
to be a national bank and Hamilton's
like what no it's not so that's that's a
powerful ideological conflict but it's
really interesting to see that Madison
also was representing you know Virginia
people from the South who didn't like
national banking because they actually
still wanted to remain private lenders
and they didn't want competition from a
national bank so there's a material
interest of of great importance to the
people who also had the ideology against
the bank so I think that you get these
material interests mixed with material
interests and it's very hard to
extricate one from another throughout
the whole period well and what from uh
from what would have been the
ideological uh basis one way or another
for saying that there should be a uh a
government bank or not a government Bank
a federal government a federal Central
Bank that was not independent let's say
well Hilton's point of view would have
been that uh in the
Constitution if there are if there are
things that should be done like collect
taxes and pay interest on bonds and all
the things that you know the federal
government is empowered to do then
whatever means you need to whatever
systems you need to create to enable
that are constit are not
unconstitutional so they're
constitutional um and Madison's idea was
nothing suddenly his idea became is what
happened I mean his idea hadn't been
this before but suddenly his idea became
anything not explicit any power not
explicitly enumerated in the document is
unconstitutional uh the necessary and
proper clause which is what Hamilton was
relying on does not mean you can just
just do anything you want I don't think
it's necessary necessarily to have like
a a bank in order to be able to collect
taxes so it's not covered and so so then
it becomes prohibited in his ideology
and you know we live with this that was
an amazing moment because Hamilton
didn't even see that coming because
Madison had never taken this position
before he'd always taken the opposite
position but when he turned politically
against Hamilton he put forth a
constitutional theory that we still take
ser iously today even though later when
Madison became president he supported
rechartering the bank and backed off all
that so again where do politics you know
partisan politics material interests and
ideology come together it's like it's
all balled up you know and it's really
hard to sort out Madison of that moment
I think would find some soless with uh
probably like Gorsuch and um and maybe
you know Clarence Thomas uh these days
in terms of like uh the federal
government doing anything in service of
anything yeah I mean this whole idea
that is taken seriously by many people
that there that there's a legitimate IDE
ideology around um you know I mean of
course the federal government's power is
limited I mean of course we want power
to be limited but the idea that I mean
early on it was like the
Anti-Federalists who had at first said
oh this this government's overpowered
it's over empowered we can't ratify the
Constitution suddenly they changed their
their Tac and they said things that we
do hear today from people in high places
that not not only is it not overly
empowered it can't do anything um which
all happened like they turned on a dime
you know really and did a 180 in uh a
few months to to develop that ideology
which people stand on to this
day um and then uh Albert Gallatin uh
comes in following uh Hamilton and basic
Al goes on a project to undo what
Hamilton did um was he doing this again
was this in service of democracy or was
it just in service
of I got a different bunch of uh friends
who are land
owners uh well that's a really again a
complicated uh issue so right so let I
mean try to pull those things apart
actually I think Gallatin um he was kind
of a Centrist in certain ways like he
came in with the jeffersonians and he
was a committed Jeffersonian and he was
Je 's treasury secretary and then he was
Madison's treasury secretary so he was
treasury secretary longer than Hamilton
because he was in two administrations
and each of those administrations was
two terms he didn't go all the way to
the end of Madison's second term but or
all the way through Madison's first term
I can't remember right now I don't have
my book in front of me but yeah he was
in he was in two administrations and had
a huge impact on the country and his his
job was I mean Jefferson told him okay
good you got the job go in there today
dismantle everything Hamilton did just
throw it out and build the right thing
and tell me everything he did wrong and
all his mistakes and everything and
we're just gonna throw it all out can't
throw the bank out because it's got a
longer Charter but everything else and
when the charter comes up we'll get rid
of that too Gallatin was not that
extreme he was a Jeffersonian but he
actually had a very interesting kind of
middle position where he went into work
at the Treasury office and was like wow
you can't just shut this down the whole
country will fall apart he had to go
back and tell Jefferson you know like um
it's a house of cards if you pull one
piece of this out the whole thing's
going to fall apart so what he did
because he was an incredibly patient
person at a time when nobody else was it
seems to me he sat there for years year
after year after year staying in
Washington staying at his desk in the
heat in the summer and humidity smoking
cigars and sitting at his desk and
working to whittle down the public debt
not just throw it out Whittle it down
Whittle it down Whittle it down and
amazing thing one of the amazing things
is that that's the period where
Jefferson who had come in on this
anti-tax small government kind of deal
that's when that's when he did the
Louisiana Purchase which had to be
financed and that's when they started
having Wars that had to be financed and
Gallatin sitting there managing this
kind of Jeffersonian ideological
extremism combined with Jefferson not
doing Jeffersonian things doing un
Jeffersonian things and focusing on
whittling down the debt which took
incredible discipline
and he did very well for a long time but
his Arc ends up being to me another one
of the sort of tragic arcs of that
period because in the end his own party
the jeffersonians is now called the
Republicans that his own party turned
against him um and so he ends up really
unable to complete his tasks and he's
just dealing with PE you know they want
to have the War of 1812 but they don't
want to pay for it he's like if you want
to have this war you know you've got to
pay for it which means we need tax which
means we need to do the hamiltonian type
of things and they're like oh he's a
hamiltonian you know he was stuck uh in
the end so it's another career that has
an arc that's not always happy but I
think really dramatic and really
interesting okay so lastly uh hamilt
Hamilton's Legacy like where do we see
that today outside of uh you know the
Broadway
musical yeah the funny thing is that
Theo way musical as unpredictable as it
was and as impactful and so forth as it
was come seeming to come out of nowhere
was really the cherry on top in a way of
a long period of building up Hamilton's
reputation again in policy circles
government federal government policy
circles in the 19 well the 1990s during
the Clinton Administration uh Robert
Rubin and people like that in Clinton's
administration were they found
inspiration in Hamilton the George W
Bush Administration uh his secretary
treasury Paulson was a uh was a Hamilton
fan and then that crosses over during
the financial crisis in 2008 when Obama
comes in and the the incoming Obama
administration starts working with the
outgoing uh Bush Administration to
wrestle with the financial crisis and
Hamilton was a huge influence on them a
huge impact on them they lionized this
this particular founder what part of it
was it the regressive of Hamilton
hamiltonian policies I mean what was it
or just the veneration of Finance they
wouldn't call it the regressive nature
um and I don't know that their
understanding of Hamilton was the same
as mine so no but they really they the
vation was for the bailout for like he
was Mr bailout Timothy gner referred to
Hamilton as Mr bailout um he was the and
so how do you how do you save a
financial system how do you heroically
save a financial system and then you
know was the interest in making sure
that every small person ordinary person
thrown out of their home make them whole
or was the thing to save you know to
save the make sure the companies that
are too big to fail don't fail
right it's the centering of Finance as a
first order um uh like an end like a a
means in and of itself versus or I
should I should say an ends in and of
itself versus a means to EMB better
people on some level yeah I mean the
rationale would be the whole country is
going to fall apart there's not going to
be milk on the shelves next week if you
don't do this which Paulson kept coming
into Congress and saying actually and
then there was milk on the shelves the
next week and the congressmen are like
you told us there was gon to be no milk
on the shelves so we don't do what you
say so you know they they don't I don't
think they think of it as like we don't
care about Ordinary People we just care
about Finance as its own self-generating
engine I think they think it's good for
the country obviously well they think it
that but but like I'm I guess like the
the starkest difference to me is do we
pay off the banks for their B with their
bad loans and say and guys do us a favor
make it easy on the homeowners or do we
pay off the homeowners who have a
obligation to pay to give that money to
the
banks like you ensure that you bail out
the
homeowner they're much more likely to
pay off the banks then by bailing out
the banks are much more likely to offer
relief to the homeowners because they
still have their primary objective which
is to make as much money as possible
from these transactions and that's in
fact what happened and I wonder like if
you I don't think you ever I think they
thought like we need to protect the
financial system to save the country but
their veneration of the financial system
was so high that
like if there's any margin of error we
got to get that money in the banks first
as opposed to making because FDR did
sort of the
opposite right I mean so it's it's sort
of just like an ideological perspective
on how important Finance is and at the
end of the day it's like they're
supposed to be there to service the
homeowners on some level not vice versa
yeah and all the people we're talking
about came from the finance world and
went back to the finance world yeah and
so it's gonna obviously going to affect
their their worldview and yeah I mean
the Democratic Party abandoned that
whole FD and thing you know long before
really and when Obama came in he'd
already given a speech to the Hamilton
project of Brookings that was set up by
Robert Rubin being very positive uh a
very well-received speech by the bankers
and Wall Street people he was talking to
um being very positive about Wall Street
and B and big banking as the you know
this the fundamental structure you know
underlying structure of how things work
in the country so it shouldn't have been
a huge surprise although I think to some
people it was the position that the
administration took on bailing how they
how they bailed
out uh William hogland uh the book is um
oh I have it I want to get the whole
title I've lost it here on my shoot I
can give you the whole T yes please do
it's the Hamilton scheme an epic tale
which is what what it is of money and
power in the founding period in the
founding period in the American founding
in the American founding
and your uh and your um substacks
newsletter is hugin's bad history we
will put a link to both those at
majority. FM and um our YouTube and
podcast description thanks so much for
your time today really appreciate it oh
thank you good conversation thanks so
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