Star Haiku

Saving up the daylight

Storing up the sun.

What a wonder the stars are

when the day is done.

Not 3 lines, not 5,7,5 syllables either.

Haiku:

Daylight storing sun.

Such a Wonder have become!

Stars, When day is done.

Going Greek on the Whole World

Turning the World into Greece

While I was writing my last post ["TISA mroe scary than TPP]I did a search for Ben Beachy and the wikileaks articles and I got 10 pages of ads. I had to spend about 10 minutes getting past google and refine my search terms to get an actual search. Wonder why? It's probably because Google, Netflix, Bing, Microsoft, etc... are writing TISA. Anyway here is the text of the public citizen News Release with my comments:

http://www.citizen.org/documents/press-release-tisa-leak-july-2015.pdf

It would be helpful if policymakers acted with some recognition that the 2008-2009 financial crisis actually occurred. It shouldn’t be hard. In the United States alone, nearly $20 trillion in wealth was lost, between lost output and lost home equity; unemployment peaked at 10 percent; millions of families lost their homes. The situation was worse in much of the world, with severe problems continuing in many countries, notably in Europe."

On the contrary the interests who are writing TISA with the support of revolving Door Trade Representatives learned from the Financial Meltdown that they can get away with three part frauds:

First stage is to use the money supply and advertising to turn some commodity (such as real estate) into a leveraged bubble. Sell debt with promises of riches by making people think they are buying homes, businesses, or going to make a lot of money.

Second Stage, use financial derivatives to bet against those people achieving their riches.

Third Stage, foreclose on the poor rubes who bought into the first stage of the Fraud.

They are using this method in country after country to practice a sort of financialized neo-liberalism. Instead of:

"Learning from the crisis means not repeating the deregulatory and non-enforcement mistakes that led up to it. Yet a secret international trade agreement, the Trade in Services Agreement (TISA), threatens to adopt and impose a global financial deregulatory standard."

The Service Industry doesn't see the meltdown as a mistake. It was a highly successful swindle that left the swindlers billionaires. The only thing the financial services industry and it's little toys (companies owning telephone, internet, roads, bridges, infrastructure, software, etc...) have learned from the financial meltdown is that burning off real wealth by mixing it with paper wealth is a great way to acquire assets and shift ownership of real wealth to themselves while punishing victims such as homeowners in the USA or little colonial enterprises like Greece.

Almost nobody guilty went to jail. No billionaires were forced to return their treasure, the chests were buried in offshore beaches and pirate havens, for later retrieval and now they have a tried and true method to extract wealth from all over the earth and accumulate power to themselves. They can do all this, and then come in and pose as saviors, piling on more debt by loaning people their own money at interest to pay the interest on the money they were loaned at interest that they couldn't pay before. They can enslave a few politicians and use them to enslave the whole world. That is the lesson this industry learned. And TISA is another round of laws that will provide all the loopholes they need to keep doing this cycle til they can declare themselves a world aristocracy formally.

Rubin and his disciples, playing the left and Friedman, Greenspan and his disciples playing the right, perfected this sort of privateering corrupt regulation in the name of de-regulation starting in the 70's. In a free-booting world you can bet on anything. Exchange rates, whether businesses will fail, etc... and if you are savvy you can make money from other folks money and other folks failure. Even better people will welcome you as a savior when you spread the money around. When a person is desperate for money they will take any terms on a loan. And when you are unscrupulous you can always find public officials to Greece, especially if you can saddle the public with those loans. Banks loan people their own money and they are grateful for it. But the key is, to get laws changed and make it all nice and legal. TISA will be a letter of Marquee for modern piracy worldwide just as de-regulation provided such letters for Enron and even crazier frauds..

"Our analysis of a leaked version of the draft agreement, along with a draft annex on financial services, identifies threats to rules and policies ranging from limits on overall bank size to consumer protections, from prophylactic protections against new speculative financial instruments to limits on transfers of personal financial data."

Of course.

"It is unimaginable that such an agreement is under negotiation while the global economy is still recovering from the most severe crisis since the Great Depression, and while Greece and other countries are still reeling from developments related to the crisis."

"Yet, thanks to the publication of the TISA texts by WikiLeaks, we know that such negotiations are in fact underway."

Once you understand that the giant banksters got away with it. It is not only imaginable, but not a surprise at all.

"Post-crisis, the United States and countries around the world have tightened their domestic financial regulations, imposing somewhat tougher restraints on Wall Street and financial centers around the world. TISA is an effort by Wall Street and its global counterparts to undo those positive steps in a forum absolutely closed to the public."

Actually the United States has had trouble implementing reforms. And with TISA they won't be able to.

"To analyze the TISA text is to see that negotiators are ignoring the lessons from the financial crisis, and to see how vital it is to shine a light on the secret TISA negotiations. These leaks show that it is imperative for TISA negotiators to suspend their efforts, publish all texts under negotiations and not resume until there is a proper public debate about their radical deregulatory maneuvers."

The "New World Order" is not the Right Wing or Left Wing fantasy. Just international piracy involving Kochs, Republicans, and the wealthy of all advertised ideologies; and it works through trade agreements like TISA.

Common Dreams is reacting to a News Release from Public Citizen:

http://www.citizen.org/documents/press-release-tisa-leak-july-2015.pdf

Read the Article at Common Dreams:

http://www.commondreams.org/news/2015/07/02/tisa-leaks-part-deux-more-evidence-concerted-attack-democracy?utm_campaign=shareaholic&utm_medium=facebook&utm_source=socialnetwork

http://ec.europa.eu/trade/policy/policy-making/analysis/sustainability-impact-assessments/assessments/

Previous post: [http://holtesthoughts.blogspot.com/2015/07/tisa-even-more-scary-than-tpp.html]

TISA even more scary than TPP

The Trade In Services Agreement (TISA)

The Trade In Services Agreement is designed to "fix" some problems with previous trade agreements from the Point of view of the corporations involved. The Service Coalition Board says about it [https://servicescoalition.org/negotiations/trade-in-services-agreement] in their "What is TISA section;

"The Trade in Services Agreement (TISA) is the most promising opportunity in two decades to improve and expand trade in services. Initiated by the United States and Australia, the TISA is currently being negotiated in Geneva, Switzerland with 51 participants that represent 70 percent of the world's trade in services."

Privateering on an International Level

But that says very little. The reality is that, as always, the devil is in the details. And the details are of more neo-liberal ideology seeking to give impunity and immunity to international corporations by shifting governing powers from local government to these for the private, separate gain public corporations.

"As WikiLeaks puts it, the regulations together create "international legal regime which aims to deregulate and privatize the supply of services—which account for the majority of the economy across TISA countries."

This is privateering on an international level. Treaties like this are pirate treaties promising to turn the World Trade Organization into the Confederate Corporations of the World. That might be an improvement over the current chaotic oligarchy but it is the institution of hierarchical oligarchy and the institutionalization of wealth and power into rulership. It won't end war or solve hunger, but it will give more power to the already powerful for their separate enjoyment as they fly over the rest of us.

Common Dreams, an Anti TISA Website reports:

"As with Wednesday's documents, Thursday's batch of texts reveals 'a concerted attempt to place restrictions on the ability of participating governments to regulate services sectors, even where regulations are necessary to protect the privacy of domestic populations, the natural environment or the integrity of public services,' WikiLeaks declares." [http://www.commondreams.org/news/2015/07/02/tisa-leaks-part-deux-more-evidence-concerted-attack-democracy?utm_campaign=shareaholic&utm_medium=facebook&utm_source=socialnetwork]

The website goes on to list initial negotiating companies, but the says:

"TiSA is based on the WTO's General Agreement on Trade in Services ( GATS ), which involves all WTO members. This means that if enough WTO members join, TiSA could be turned into a broader WTO agreement and its benefits extended beyond the current participants." [http://ec.europa.eu/trade/policy/in-focus/tisa/]

Common Dreams alleges that:

"the corporate aim [is] to use TISA to further limit the public interest regulatory capacity of democratically elected governments."

They then quote Ben Beachy:

"TISA would expand deregulatory 'trade' rules written under the advisement of large banks before the financial crisis, requiring domestic laws to conform to the now-rejected model of extreme deregulation that led to global recession."
—Ben Beachy, Public Citizen's Global Trade Watch

What is TISA?

The services in question "relate to regulation of financial services, e-commerce, telecommunication, and maritime transport." These are powerful public services, many of which are within the public realm and are vital services that are also natural monopolies. They have to be regulated or they tend to be run as feudal kingdoms.

De-regulating them would put some of them back in the state they were in the 19th century and would allow 19th century style impunity and immunity for newer services like e-commerce and telecommunications, both of which are extensions and modernizations of the concept behind the Post Office and have traditionally been associated with the Post Office and been so important and powerful that they demand their own organ of government out of reach of both legislature and post office under normal circumstances. Deregulating them creates a power that is part of rule and gives it to private individuals, establishing kings.

The Euro folks said:

"Like any other trade negotiations, the TiSA talks are not carried out in public and the documents are available to participants only." [http://ec.europa.eu/trade/policy/in-focus/tisa/]

Like with TPP I've been hoping that the Wikileaks were premature and the allegations were going to be proved false but it seems that the secrecy that is still around TISA should be a warning that the allegations are liable to be true. Nobody goes to such extremes to hide a treaty unless there is something sketchy about it. This sort of thing goes all the way back to the Jay Treaty, which the Washington Administration tried to keep secret because they knew it would infuriate many Americans.

...more on this in my next post "Going Greek on the Whole World" [http://holtesthoughts.blogspot.com/2015/07/going-greek-on-whole-world.html].

Common Dreams is reacting to a News Release from Public Citizen:

http://www.citizen.org/documents/press-release-tisa-leak-july-2015.pdf

Read the Article at Common Dreams:

http://www.commondreams.org/news/2015/07/02/tisa-leaks-part-deux-more-evidence-concerted-attack-democracy?utm_campaign=shareaholic&utm_medium=facebook&utm_source=socialnetwork

http://ec.europa.eu/trade/policy/policy-making/analysis/sustainability-impact-assessments/assessments/

Bed is Good

Sleep, is the filing cabinet for life:

organizing our dreams;

settling our cares.

Sharing our fears with the past.

 

Sleep, is where we put away yesterday;

Store what is worth keeping

Stow away what we can't carry.

And dump it in the ocean of chaotic things.

 

Awake, we can live another day.

 

Christopher H. Holte 7/7/2015

Privateering on Higher Education

A Review of Christopher Newfield's "From Master Plan to No Plan - The Forty Year assault on the Middle Class."

Source: Facebook article [https://www.facebook.com/WorldTruthTV/photos/

It's hard to believe but we almost achieved the goal of free higher education for qualified students. All that changed in the 60's. A deliberate multi-pronged attack on the middle class was launched then. And the centerpiece of this pirate attack was a privateering attack on the very notion of Free Higher Education. Substituting for free education was a system of loan guarantees that pretended to guarantee loans for students, but were designed to guarantee profits for investors and saddle students with debt. The changes weren't by accident. In a review by Aaron Bady and Mike Konczal titled From Master Plan to No Plan -- the Slow Death of PUblic Higher Education encapsulates the message in Christopher Newfield's book.

They note that Ronald Reagan ran for Governor in 1966:

"...after running a scorched-earth campaign against the University of California, Reagan vowed to “clean up that mess in Berkeley,” warned audiences of “sexual orgies so vile that I cannot describe them to you,” complained that outside agitators were bringing left-wing subversion into the university, and railed against spoiled children of privilege skipping their classes to go to protests" ... "it was the University of California at Berkeley that provided the most useful political foil, crystallizing all of his ideological themes into a single figure for disorder, a subversive menace of sexual, social, generational, and even communist deviance." [Dissent Magazine Review]

Reagan vowed to cut taxes. He claimed that cutting taxes would counter-intuitively increase revenues. And he went after Higher Education with a vengeance. Reagan's program was Nationwide. It involved a paradigm shift from the Right Wing of the country. Where previously they'd supported notions of equality. They now saw equality as dangerous. Reagan's policies marked a shift in policies from free education for poor and middle class to:

cutting "state funding for higher education, laid the foundations for a shift to a tuition-based funding model, and called in the National Guard to crush student protest, which it did with unprecedented severity. But he was only able to do this because he had already successfully shifted the political debate over the meaning and purpose of public higher education in America. The first “bums” he threw off welfare were California university students. Instead of seeing the education of the state’s youth as a patriotic duty and a vital weapon in the Cold War, he cast universities as a problem in and of themselves—both an expensive welfare program and dangerously close to socialism. He even argued for the importance of tuition-based funding by suggesting that if students had to pay, they’d value their education too much to protest."

Essentially, in the propaganda of the Reagan years Students were parasites, welfare queens and needed to be disciplined. Essentially this was preliminary to the theme we have now of the middle class as "takers." But it also was part of a program of abusive lending laws that eventually made education loans difficult to impossible to discharge in bankruptcy, starting with legal changes in 1998 that made Federal loans non-dischargeable and completing with changes in 2005 that applied those changes to private loans. [student-loan-debt_b_1403280.html]

Thank the Gypper

So, if you don't like the fact that a decent education now costs even more at a State College or University than some private ones, thank the Gipper and his allies in the GOP. This was their plan.

This was win/win for the Cons.

1. It transfers wealth gained from any increased productivity from students back to the coupon clipper investor class.

2. It puts ex students in hoc to the loan officers, which restricts their horizons post college to for profit activities so they can pay back their loan. This limits the pro-bono, volunteer and mission centered type work to those occupations that subsidize the loans.

3. It makes private education on a parity with public education and drives up prices for both -->funneling money to investors and administrators.

4. And yes it dumbs down people by scaring them, thus shutting off the pre-frontal lobes and reducing their willingness to employ those analytical abilities they worked so hard to cultivate.

5. It discourages people from pursuing a higher education, protecting the futures of otherwise undistinguished kids of privilege

6. It made it easier to bully academics and to replace academic officers with faceless administrators by shifting the focus of universities from educating students to raising funds and dealing with budget cuts.

More To the Story

There is much more to the book than a discussion of how the Republicans privateered higher education. It's also about how the Far Right dominated and conquered academia. It's worth reading. And the reality is that we middle class folks know the value of a public education, and if government officials abandon us, we've looked elsewhere:

"For-profit education flooded the market only after the state began to abandon its responsibility to create sufficient institutional capacity in the public system. The problem is not government action, but inaction. As the government gave up its Master Plan responsibility to educate California students, the for-profit sector expanded to fill the demand."

Sources and Further reading:

SALLIE MAE Timeline [https://en.wikipedia.org/wiki/Sallie_Mae]

From Master Plan to No Plan: [https://www.dissentmagazine.org/article/from-master-plan-to-no-plan-the-slow-death-of-public-higher-education]

You can Read Newfield's book here: https://selforganizedseminar.files.wordpress.com/2011/11/newfield_unmaking_public_univ.pdf

This Huffingtonpost article on the history of Student debt confirmed my memory:

[http://www.huffingtonpost.com/fred-bauer/student-loan-debt_b_1403280.html]

This article was sparked by a post by Dejan Kostic at "World Truth TV":

https://www.facebook.com/WorldTruthTV?fref=photo

http://files.eric.ed.gov/fulltext/EJ684842.pdf

Hamilton on Money

Wonky warning

Hamilton was trying to solve an impossible problem. On page 62 of "Washington's Circle" the author notes:

"Finances were the government's biggest problem as trickling revenue allowed an already mountainous public debt t ogrwo while accumulating interest, all in arrears. The amounts were terrifying. The States owed a total of $21 million...country owed almost $12 million in foreign loans. The central government owed it's own citizens a whopping $42.5 million." ... "In sum, the total of $75 million could be calculated in modern worth at about $2 trillion in purchasing power but as much as $30 trillion in labor value." [page 62, "Washington's Circle"]

And this with a national population less than a tenth of what it is today the USA had a deficit that in modern money wouldn't be much different from our entire GDP. The problem Hamilton had to solve was greater than what we face.

In Hamilton's collected works, he was applying an expertise he'd developed from shortly after he retired from the military when he wrote a bank plan and sent it to Robert Morris. The problem he identified then had only grown since then (see Hamilton's Bank Plan from 1781). This article presents his writings on money:

On The Establishment Of A Mint

Communicated to the House of Representatives, January 28, 1791. [From Volume 4 of his collected works]

 

Hamilton broke his arguments down into 6 parts:

1st. What ought to be the nature of the money unit of the United States?

2d. What the proportion between gold and silver, if coins of both metals are to be established?

3d. What the proportion and composition of alloy in each kind?

4th. Whether the expense of coinage shall be defrayed by the government, or out of the material itself?

5th. What shall be the number, denominations, sizes, and devices of the coins?

6th. Whether foreign coins shall be permitted to be current or not; if the former, at what rate, and for what period?

Hamilton's vision couldn't be any clearer. He was ahead of his time. Of the founding fathers his understanding of the subject of finances was unparalleled. In answering basic questions he is setting for guidance for this country that we've done well to follow.

 

What ought to be the nature of the money unit of the United States?

 

He starts his exposition by discussing the history and weights of the standard "dollar" "piece of 8" from Spain and it's evolution into the money used by American Colonies. He starts by noting that the dollar reflects the relative scarcity of Gold in relationship to Silver:

"The difference established by custom in the United States between coined gold and coined silver has been stated upon another occasion to be nearly as 1 to 15.6."

Coins of Gold and Silver should reflect their relative scarcity.

And this also answers question two. He suggests that neither Gold nor Silver be established as the "standard". But he makes an almost surprising statement on whether one or the other should be preferred. He is famous for preferring the Gold Standard, where Congress preferred the more abundant silver standard. He then makes a surprising statement:

"Contrary to the ideas which have heretofore prevailed, in the suggestions concerning a coinage for the United States, though not without much hesitation, arising from a deference for those ideas, the Secretary is, upon the whole, strongly inclined to the opinion, that a preference ought to be given to neither of the metals, for the money unit. Perhaps, if either were to be preferred, it ought to be gold rather than silver."

Again he's referring to Gresham law. If we make an internal standard of gold coins (or silver coins) those gold coins become reservoirs of value and get driven out of circulation. He's been quoted by gold bugs as wanting a gold standard over a silver standard. But his opinion is more nuanced than that:

"The inducement to such a preference is to render the unit as little variable as possible; because on this depends the steady value of all contracts, and, in a certain sense, of all other property. And, it is truly observed, that if the unit belong indiscriminately to both the metals, it is subject to all the fluctuations that happen in the relative value which they bear to each other. But the same reason would lead to annexing it to that particular one, which is itself the least liable to variation, if there be, in this respect, any discernible difference between the two."

If the dollar is tied to either Gold or Silver, then fluctuations in the price of those commodities will affect the value of the dollar, and not in a positive way. But more important than the circulation of coin was it's value as a backing for notes circulated:

"But bank circulation is desirable, rather as an auxiliary to, than as a substitute for, that of the precious metals, and ought to be left to its natural course. Artificial expedients to extend it, by opposing obstacles to the other, are, at least, not recommended by any very obvious advantages. And, in general, it is the safest rule to regulate every particular institution or object, according to the principles which, in relation to itself, appear the most sound."

Hamilton Advocating for Paper Money

Hamilton was not advocating exclusive use of coins.

"In addition to this, it may be observed, that the inconvenience of transporting either of the metals is sufficiently great to induce a preference of bank paper, whenever it can be made to answer the purpose equally well."

Bank Paper is a term that includes paper money.

3d. Sound Money and the proportion and composition of alloy.

He wants sound money, yes, but he's talking about something more advanced than money as a precious commodity. He explains

"But, upon the whole, it seems to be most advisable, as has been observed, not to attach the unit exclusively to either of the metals; because this cannot be done effectually, without destroying the office and character of one of them as money, and reducing it to the situation of a mere merchandise; which, accordingly, at different times, has been proposed from different and very respectable quarters; but which would, probably, be a greater evil than occasional variations in the unit, from the fluctuations in the relative value of the metals; especially, if care be taken to regulate the proportion between them, with an eye to their average commercial value."

The Key to Sound money is whether the money is backed by goods and services.

Not a Gold Bug

But Hamilton understood the importance of providing sufficient currency for trade and commerce rather than focusing too much on Gold versus Silver. In this sense he anticipated issues that would come up years later as "Gold Standard" advocates bitterly contested "Silver Standard" advocates. He understood, long before Friedman became famous for it, the importance of using money and notes to make sure people have enough currency to buy and sell and engage in commerce:

"To annul the use of either of the metals as money, is to abridge the quantity of circulating medium, and is liable to all the objections which arise from a comparison of the benefits of a full, with the evils of a scanty circulation."

4th. Uniform Weights and Measures: Whether the expense of coinage shall be defrayed by the government, or out of the material itself?

Hamilton is talking about universal weights and measures. He doesn't seem attached to any particular solution. But he advances that the values be uniform. When answering the question of how much seignorage the government ought to receive. And he notes:

"It is sometimes observed, on this head, that, though any article of property might, in fact, be represented by a less actual quantity of pure metal, it would nevertheless be represented by something of the same intrinsic value. Every fabric, it is remarked, is worth intrinsically the price of the raw material and the expense of fabrication; a truth not less applicable to a piece of coin than to a yard of cloth."

He then notes that the value of money is related as much to the wealth and good name of the country, it's government and its ability to pay its bills. Thus money is not to be considered raw material/bullion but analogous to "fabric":

"The fact is, that the adoption of them as money has caused them to become the fabric; it has invested them with the character and office of coins, and has given them a sanction and efficacy, equivalent to that of the stamp of the sovereign. The prices of all our commodities, at home and abroad, and of all foreign commodities in our markets, have found their level in conformity to this principle."

This was a step along the way to fiat money. But most importantly money should have a standard measure so that it can be relied on:

"The foreign coins may be divested of the privilege they have hitherto been permitted to enjoy, and may of course be left to find their value in the market as a raw material. But the quantity of gold and silver in the national coins, corresponding with a given sum, cannot be made less than heretofore, without disturbing the balance of intrinsic value, and making every acre of land, as well as every bushel of wheat, of less actual worth than in time past."

There are some who would argue with this position, but the principle is incontrovertible. Money is used for trade and as such it has to measure the value of the thing it is traded for. And this is especially true if a country lives in trade with it's neighbors:

"If the United States were isolated, and cut off from all intercourse with the rest of mankind, this reasoning would not be equally conclusive. But it appears decisive, when considered with a view to the relations which commerce has created between us and other countries."

Fiat money in the context of the revolution would have had trouble surviving without the ability to trade for gold and silver.

5th. What shall be the number, denominations, sizes, and devices of the coins?

Following from his argument, he wanted to keep the US Dollar approximately equal to money already in circulation. To make it easier to use, more familiar to use and to regulate value. He concludes money should:

"continue to represent in the new coins exactly the same quantity of gold and silver as it does in those now current; to allow at the mint such a price only for those metals as will admit of profit just sufficient to satisfy the expense of coinage."

6th. And this also answered #6 about foreign money.

Of course:

" withdrawing it from those of foreign countries, and suffering them to become, as they ought to be, mere articles of merchandise."

Hamilton defines our money:

He suggested the following coins:

One gold piece, equal in weight and value to ten units, or dollars.

One gold piece, equal to a tenth part of the former, and which shall be a unit, or dollar.

One silver piece, which shall also be a unit, or dollar.

One silver piece, which shall be, in weight and value, a tenth part of the silver unit, or dollar.

One copper piece, which shall be of the value of a hundredth part of a dollar.

One other copper piece, which shall be half the value of the former.

Man that would be cool.

Bills of Exchange

Hamilton escoriated bills of exchange, paper money, on the grounds that it was usually used as a means to avoid paying bills and favor debtors over creditors. For example he wrote how:

"Rhode Island, New Jersey, North Carolina, and Georgia, making paper money a legal tender for the debts of those creditors; which, it is known, sustained a very great depreciation in every one of those States. These very serious and compulsory interferences with the rights of the creditors" [Vol 5]

So his opposition to paper money, was based more on the basis of the soundness of the underlying sureties and quality of the money produced.

The facilitating of pecuniary remittances from place to place—

"But much good would also accrue from some additional provisions respecting inland bills of exchange. If those drawn in one State, payable in another, were made negotiable everywhere, and interest and damages allowed in case of protest, it would greatly promote negotiations between the citizens of different States, by rendering them more secure, and with [159]it the convenience and advantage of the merchants and manufacturers of each." [Vol 4]

That is enough for this post.

Sources and Further Readings:

Online Library of Liberty: The Works of Alexander Hamilton, (Federal Edition), vol. 4

More on Alexander Hamilton:

https://www.youtube.com/watch?v=HRBhaKZGEVA

http://www.nakedcapitalism.com/2015/06/who-was-alexander-hamilton-militarism-high-finance-and-checking-the-democracy.html

LaRouche group on him (actually a very good article!):

http://www.larouchepub.com/eiw/public/2015/eirv42n19-20150508/03-41_4219.pdf

Post Script.

I started this post months ago and had to pause due to other concerns. I'm glad I put it on pause because I didn't like my introduction. Now the post makes more sense because I was able to find another source to quote for the introduction and put the piece in the context of the year that he wrote his Report on Manufacturers. I'm also finding discrepancies between people's writings. Someone gave credit for the 1781 bank proposal to Robert Morris, but it's in Hamilton's hand then and so the biographer skipped over Hamilton's service to Morris. It's a minor discrepancy, but a similar one I just discovered on the subject of fisheries as Jefferson and Hamilton seem to have exchanged letters on the subject. Possibly they read each other's letters and might have acted on them had they not started squabbling like they did more and more as Washington's first Term finished. By the Second Term Jefferson left government and Hamilton soon followed. Hamilton won his arguments with Jefferson because he'd done his homework and because the Republicans were reacting to a scapegoat. Hamilton was not a saint. He was an elitist. But so were they. And he was not a monarchist and he cared about this country more than he cared for his personal aggrandizement.

What's missing from the Constitution

Question: What is missing from the Constitution?

It's weird how the media, especially the History Channel and related, have been focusing on the Washington Administration and the fight between Hamilton and Jefferson, because I've spent the last several years thinking about them too. It's like our collective Zeitgeist is looking for the cause of an illness. It turns out we have the equivalent of a tick bite. Something that started small and soon infected the whole country. The fact is that Jefferson, the architect of our vision of who we are from the Declaration of Independence, and Hamilton, architect of our federal and economic system with Jefferson's friend Madison, started fighting like School-children while serving our First President George Washington. With the result that two parties were created who have been busy sabotaging and fighting each other off and on ever since.

Jefferson said in the Declaration of Independence:

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed" [declaration_transcript]

The fight was actually fought at two levels. Among the elites it was a fight over "assumption" and gradually morphed into other fights as the people involved tried to recruit support from ordinary citizens. The Jeffersonians called themselves Republicans and claimed to be defending democracy. The Federalists wanted a strong Federal Government and were focused on the USA having a strong economic system. Jefferson allegedly wanted an "agrarian society."

Hamilton's vision was Union and the constitution. He wanted a strong Federal Government that could develop itself into a stable economy and defend itself. Hamilton's party came to be known as the Federalists.

But Jefferson mischaracterized the Federalists as wanting a Monarchy. And the Federalists made it sound like the Republicans were Jacobins trying to impose Direct Democracy. The elites feared direct democracy. And even the Federalists feared actual monarchy. Their initial differences were small. The Federalists were centered on the growing centralized cities. The Republicans were centered on the frontiers and countryside. The Towns in New England gravitated to the Republican cause too. Hamilton's vision was mostly an urban vision of industry and technological advance. But both these people had a pretty much similar vision even with regard to slavery. Both wanted to end slavery. It could have been done. The North had slaves too in the 1790s. New York:

"Slavery was important economically, both in New York City and in agricultural areas. In 1799, the legislature passed a law for gradual abolition. It declared children of slaves born after July 4, 1799 to be legally free, but the children had to serve an extended period of indentured servitude: to the age of 28 for males and to 25 for females. Slaves born before that date were redefined as indentured servants but essentially continued as slaves for life."

That the south didn't end slavery was more tied to their social hierarchy and plantation aristocracy than the ideals of the Founders or party politics. That we never arrived at the "mixed system" that Madison talked of in Federalist 39. The Genteel Aristocrats of the Republicans never completely accepted the raucus and non-deferential politics of their followers. The South was culturally attached to it's nobility. That was true for Jefferson, who hated open conflict with people and thus preferred to fight via proxies. And it was true for George Washington, whose attachment to the Federalists was in part driven by his believing that citizens should know their place, respect their elders and if they don't like a set of policies vote differently in the next election. It was also true for Madison and even more so for subsequent leaders of the aristocratic elite from the South (and North to a degree too). And the reason was the conflict between plantation style government and "politan" or democratic town government. For example, Madison, despite opposing Hamilton's centralizing policies, never fully backed the "Democratic Societies" that he helped spark the creation of because:

"He could not accept intense localism. Southerners, especially influential Virginians, had been unacquainted with the raucous and sometimes unruly democracy of town meetings." [page 334 of "Washington's Circle"]

They also crafted a constitution that explicitly left out even reference to terms like "metropolitans", "towns" or local government. In the South the Constitution would reflect their existing State and County hierarchy. A hierarchy where Judges were virtually kings, and the legislators dominated by planters. Elites from the North secretly admired this framework because it gave the elites veto power over local government. For:

"They Framed the Constitution from an idealized reverence for representative government. In their world, government was made orderly by educated elites who wielded authority wisely and were appreciated by their inferiors." [Washington's Circle pg 334]

And the Northerners, being of equally upper class origins were perfectly happy to leave principles of local rule, local representation and local government out of the Mix. They supported Hamilton's vision of a powerful Federal Government because:

"The effort to install idealized, deferential democracy on the nation exasperated New Englanders who were well acquainted with the temper and tone of the town meeting. [Aristocratic] New Englanders accordingly opposed high levels of such "democracy" in representative government, and they became high Federalists for reasons other than affinity with Alexander Hamilton's economic programs." [ibid page 334]

Aristocrats, North and South were inclined to see:

"The People were indeed a great beast, they said, and when newspapers became virulent and popular opposition violent, even some southerners gradually agreed." [ibid page 334]

Some Southerners, including George Washington, felt the same way. This is part of the reason that the House of Representatives was designed in a way that made gerrymandering and other abuses easy. And why the Senate represented the States in a way that gives as much power to states with small populations as to giant states or great cities with populations that dwarf them.

If Hamilton was like Dr. Frankenstein crafting the constitution out of his dream of a strong country that could defend itself and be wealthy. A lot of the parts came from his Igor Madison whose idealized version of democracy led to a government with all the internal fighting of a New England Town Meeting, but failing to adequately adjudicate the interests of towns and cities.

Answer: What is missing from the Constitution is the Assembly

When Jefferson, Madison, Washington and the High Federalists up north, supported Hamilton's version of Federalism they were doing so because they'd seen the kitchen and they didn't like the rough and tumble of politics that actually considers all views. They had envisioned democracy as being idealized, genteel and people as knowing their place. But they were soon to find that the idea that, even in the south the common folks knew their place and were content to be slaves, or serfs, poor white trash or overseers, or to live in poverty while toiling for masters -- was an illusion. What was missing from the Constitution was respect for the right of people to local democracy. They heard the declaration and realized that by "all the people" it implied hair dressers and horse drivers, pile drivers and even servants; Even Black servants. And once the cat was out of the closet the federalists/Republicans and their descendent organizations were never going to put it back in the closet. Even the people living on a plantation have an inalienable right to be governed with "consent of the governed". Those rights are our unalienable rights. Not just the rights of the Right people. What is missing from the constitution is the enfranchisement of people in their settlements. The expansion of democracy at the local level. The plantation, the factory, those are all governments too.

Anyway, this is a piece of a larger narrative, but I wanted to share it with you today.

Happy July Fourth from our imperfectly constituted country.

To this day conservatives quote these authors as if they were God. And they were brilliant.

Sources and Further Reading

Washington's Circle:

http://www.amazon.com/Washingtons-Circle-The-Creation-President/dp/1400069270

Further reading on our current financial mess:

http://billmoyers.com/content/six-films-on-the-financial-crisis/