Wikinvest Wire

If Jefferson were in Washington today...

Wednesday, January 27, 2010

As the congressional hearings on the role of the Federal Reserve and the Treasury Department in the late-2008 bailout of AIG proceed (live blogging here at the WSJ if you want the short version), perhaps now is a good time to recall the words of Thomas Jefferson:

I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.
...
The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.
...
That paper money has some advantages is admitted. But that its abuses also are inevitable and, by breaking up the measure of value, makes a lottery of all private property, cannot be denied.
...
Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burden all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs.
He left out the part about how, for a half decade or so once every few generations, the People will feel as though they've struck it rich - that the combination of stock market wealth and housing market wealth would briefly appear to provide an everlasting bounty.

But, other than that, it's still pretty good after more than 200 years.

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7 comments:

Anonymous said...

I see that Oregon just passed a huge tax increase on business owners. Do you have any thoughts on that?

Anonymous said...

People and businesses will leave or shut down.

Tim said...

The measure was rejected soundly in Central Oregon, but, on the other side of the mountain (where most of the people live) they apparently loved it.

Anonymous said...

There is a few trillion owed in back taxes going back to the invention of the tax and spend economy in the 80s. Someone has to pay back all this debt at some point. Taxes will go up at city, state, and federal levels. Hopefully you're close to retirement and have already had a lifetime of low taxes, if not then you might want to have a talk with mom and dad and let them know they owe you something.

Anonymous said...

Tim,

FYI, you might want to delete the Jefferson quote. Although it is frequently circulated around various blogs on the internet, it has been proven to be a hoax. He never made such a quote. See below references:

http://wiki.monticello.org/mediawiki/index.php/Private_Banks_(Quotation)

http://www.snopes.com/quotes/jefferson/banks.asp

Tim said...

"It has been proven to be a hoax?"
Certainly not the first part - see updates above.

Tim said...

Regarding the first reference:

The first part of the quotation ("If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered") has not been found anywhere in Thomas Jefferson's writings, to Albert Gallatin or otherwise. It is identified in Respectfully Quoted as spurious, and the editor further points out that the words "inflation" and "deflation" did not come into use until 1864 and 1920, respectively.

There are multiple uses of the word "inflation" in these Jefferson writings from before 1820.

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