Students of American history find it remarkable how struggles of the founding days continue to repeat themselves down through the decades and centuries. That is because so many of the founding disputes were based on differing views of human nature, and human nature seems to change very little.
Currently, we are locked yet again in one of our recurring half-century battles over the size of banks. In this case, size matters because size equals power. Here again we see Thomas Jefferson and Alexander Hamilton head-to-head. Hamilton wanted a very large and powerful national bank, and banking system, to foster large-scale investment, economic expansion, and competition with older European systems. Jefferson opposed this scheme because he anticipated the inordinate political power such concentrated wealth would have within the democratic process.
Jefferson saw a handful of bankers controlling vast economic power, encouraging speculation, manipulating investments and currency values, and warping the political process to its own ends. He knew that money equaled power and that it distorted political systems, including republican ones, throughout history. What a surprise!
Yet, here we are now, two and a quarter centuries later, and, though Jefferson was clearly right, Hamilton has won…yet again. Now the few giant banks, combinations of traditional banking and rampant, largely unregulated speculation, not only too big to fail–and thus guaranteed against collapse by everyday taxpayers–but also too big to be brought under public regulation. An army of lobbyists, upwards of 1,500 or more, many former members of Congress and their families, swarming the halls of the peoples’ Congress, warning of apocalypse if they are required to be transparent, even with public money, protecting astronomical bonuses (distributed as a nose-thumbing thank you to those of us who bailed them out), and trading campaign contributions for influence.
Expecting the predictable tut-tutting about how I’ve traded my chance for statesmanship for populist ranting, my response is: Jefferson, once again, was right, and I’m proud to be on his side.