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