Conservative Hypocrisy Goes Back To America's Beginning

Summary

The 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

• 🏛️ 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.
• 🌐 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.
• 🔄 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.
• 🤝 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.
• 🔍 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.
• 💡 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.
• 💼 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.
• 📚 It mentions how figures like James Madison and Albert Gallatin navigated the political and ideological landscape, sometimes changing positions based on evolving political circumstances.
• 🎭 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.
• 🏦 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.
• 🔄 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

00:00

😖 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.

05:01

🤔 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.

10:02

🏛️ 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.

15:03

🎭 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.

Keywords

💡Continentalists

The term 'Continentalists' refers to those who advocated for a strong national government during the American Revolution, as opposed to a confederation of states. In the video, this concept is tied to figures like Alexander Hamilton, who wanted a centralized government to replace the Continental Congress, which was seen as too weak and ineffective. The Continentalists' perspective is central to understanding the ideological divide over the future structure of the United States.

💡State Sovereigntist

State Sovereigntists were individuals who believed in the primacy of state governments over a federal government. They opposed the idea of a strong central government, fearing it would infringe upon the rights of the states. In the context of the video, this concept is contrasted with the Continentalists' view, highlighting the early American political struggle between those who wanted to preserve state power and those who sought a unified national authority.

💡Democracy

Democracy, as discussed in the video, is the political system where power is vested in the people, who have the right to choose their government. It is mentioned in relation to the rebellions and movements that sought to challenge the status quo, advocating for greater representation and equitable distribution of rights and responsibilities, such as taxation. The video suggests that democracy was a driving force behind the push for change in early America.

💡Rebellions

Rebellions in the script refer to uprisings or resistance movements that occurred in early America, often as a response to perceived injustices or the desire for more democratic representation. These rebellions are indicative of the social and political unrest that contributed to the shaping of the country's future, as they represent the pushback against the established order by those seeking greater rights and representation.

💡Taxation

Taxation is the compulsory contribution to state revenue, levied by the government on workers' income and business profits. In the video, it is discussed in the context of the social contract and the obligations of property owners, who were expected to contribute more due to their wealth. The script uses taxation as an example of the economic and political debates that were central to the formation of the American government.

💡Federalists

Federalists were those who supported the ratification of the United States Constitution and favored a strong federal government with enumerated powers. The term is used in the video to describe the political faction that emerged during the debate over the Constitution, which included prominent figures like Alexander Hamilton and James Madison, before their ideological split.

💡Anti-Federalists

Anti-Federalists were individuals who opposed the ratification of the U.S. Constitution, fearing that it would give too much power to the federal government at the expense of state sovereignty and individual liberties. The video mentions this group as part of the early political divide in America, emphasizing the ongoing tension between centralized and decentralized power.

💡Hamiltonian

The term 'Hamiltonian' is used in the video to describe the economic and political philosophy associated with Alexander Hamilton, which includes support for a strong central government, a national bank, and a diversified economy. The script discusses how Hamilton's ideas influenced later financial policies and were seen as a model for handling financial crises, such as the one in 2008.

💡Jeffersonian

Jeffersonian refers to the political philosophy of Thomas Jefferson, which emphasizes agrarianism, limited government, and states' rights. In the video, the term is used to contrast with Hamiltonian ideas, highlighting the ideological differences between these two influential figures in American history and their impact on the country's development.

💡Albert Gallatin

Albert Gallatin, as mentioned in the video, was a key figure in American finance who served as Treasury Secretary under Thomas Jefferson and James Madison. He is known for his efforts to reduce the national debt and for his role in the Louisiana Purchase. The script discusses Gallatin's pragmatic approach to finance, which was influenced by both his political ideology and the practical needs of the country.

💡Financial Crisis of 2008

The Financial Crisis of 2008 is a significant economic downturn discussed in the video, which had a profound impact on global financial markets and led to various government interventions. The script refers to this crisis to illustrate the influence of Hamiltonian ideas on the policy responses of the time, particularly the decision to bail out financial institutions to stabilize the economy.

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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