I’ll summarize our respective positions on minor points and then go on to address the important aspect of our dialogue:
1. You think gold is an inadequate standard, I think it is better than the fiat non-standard;
2. You think Hamilton was more knowledgeable in financial matters than Jefferson. So do I. I assume we can also agree that Milken, Boesky, and Ebbers are also more financially savvy than Jefferson. Does that mean we should adopt their ideas without question?
3. You think the First Bank of the U.S. was a necessity for development. I don’t. It’s 20 year charter was not even renewed in 1811.
4. You believe Rothbard couldn't sharpen Smith, Ricardo or Mills quills. I am acquainted with all of these gentlemen, having, myself, been a product (flunkie, dupe?) of the establishment. Rothbard opened my eyes to the reality of the system.
5. You believe Smith, Mills, and Ricardo would favor the currently constituted fiat monetary system. I don’t.
6. You believe the BoE fractional reserve model was an advancement; I think it was an unholy alliance between monied interests and the crown for narrow interests and counter to the general interest.
7. You have bad words for Jefferson, Adams, Madison, Monroe, Taney, Jackson and van Buren and object to my questioning Hamilton’s motives and contribution. I feel just the opposite.
8. You think my problem is that I ignore the velocity of money. I wonder what leads you to such an absurd conclusion. Nonetheless, you go on to make the following, demonstrably incorrect statement with regard to this very area you believe me to be mis-informed about: When [velocity] is rapid the MS grows when it slows down it shrinks.
9. You observe that most wealthy nations have central banks and take that as proof that central banks are good.
Upon my return from work, I will attempt to get you to focus on the issue of what constitutes a good money. That was the one area you did not address in your response (other than to denigrate my choice of words for capturing the essence of any good money system: scarcity integrity.
A strict gold standard is a complete fantasy so its alleged superiority is irrelevent. Currency always has an element of "fiat" comprising its value.
The crooks you name have nothing to do with the astute financial program of a man of incredible genius and impeccable integrity. May have well asked if we should follow the policies of Willie Sutton (one of your heros I am sure). I never said we should accept anything without question although many gold buggers seem to do just that wrt their favorite pretty metal.
The negative financial impacts of allowing the Bank charter to lapse were so great that it was rechartered within five yrs. by Congress controlled by republicans ideologically opposed to the whole concept of a national bank. President Monroe was not only a bitter enemy of Hamilton but also a republican ideology signed the bill without protest.
I only wish the establishment would return to the concepts and understandings of those economists who believed in capitalism and turned away from the Marxist tinged ideas of the last 50 yrs.
I never said those men would support the current system merely that Smith recognized and mentioned the growth attributable to the existence of the national banks of England and Scotland.
In the English constitution the Crown does represent the general interest of the nation. Formation of the BoE came as a result of another expression of the general interest of the nation, the Glorious Revolution. Thus, in a sense it was the culmination of a political movement which changed much of British institutional life. That was also the first time a bill of rights of Englishmen was enacted.
Hamilton's motives cannot be seriously questioned by any student of the era. He was completely consumed with the idea of strengthening the Rule of Law and by such the permanent strength of the Union created by the Revolution and constitution. I have no problem with disinterested and objective questioning of his methods but none of those mentioned were either. In addition, they were economic ignoramuouses. The combination of ideological and philosophical blindness to economic matters hardly makes their criticism impressive and in fact that was why none could stand against H.'s arguments and why they were reduced to deceit, intentional spreading of falsehoods about him and his ideas. Surely you do not believe he was working for the British or to bring about a monarchy like your allies?
I don't say existance of the bank in wealthy countries is proof of anything but certainly is a point in its favor as not being destructive of the creation of wealth. Be honest with your characterization of my comments.
Once again I said that the money supply grows when business activity picks up not that the money supply grows as a result of velocity increasing. Again don't mischaracterize my comments.
"Good" money can be almost anything it all depends upon the institutional arrangements and the integrity of those controlling them. Bill Clinton in control of a gold standard would compromise it if he so desired and a decent man would control a paper money supply properly. No standard incorporates all the appropriate characteristics of "good" money. All have flaws and gold has the huge flaw of an inherent deflationary bias.