A Call to Remove Lew

Cato Institute's Steve Hanke, like Ben Bernanke. is up in arms that Treasury Secretary Jack Lew wants to remove Alexander Hamilton from the $10 bill.

In a post titled, Remove Lew, Not Hamilton, he wriyes:

On June 17th, Treasury Secretary Jack Lew shocked many, including former Chairman of the Federal Reserve Ben Bernanke, when he proclaimed that Alexander Hamilton (1755-1804) – the first and foremost Treasury Secretary – would be demoted and share the ten-dollar bill with a yet unnamed woman.  Undaunted by wide-spread criticism, Secretary Lew continued to press his case at an event at the Brookings Institution on July 8th.  Asked about the ten-dollar bill’s selection, Secretary Lew insipidly claimed that the ten-dollar bill was the “next up” for redesign to help combat forgery.  The diminution of Hamilton, for whatever reason, is simply indefensible.

So what arguments does Hanke write to defend Hamilton? Well, there is this one, which makes him sound a bit like the Alexis Tsipras of his day:

 Public finances hung like a threatening cloud over the government. Recall that paper money and debt were innovations of the colonial era, and that, once the Revolutionary War began, Americans used these innovations to the maximum.  As a result, the United States was born in a sea of debt.  A majority of the public favored a debt default.  Alexander Hamilton, acting as Washington’s Secretary of the Treasury, was firmly against default.  As a matter of principle, he argued that the sanctity of contracts was the foundation of all morality.  And as a practical matter, Hamilton argued that good government depended on its ability to fulfill its promises...

Hamilton won the argument and set about digging the country out of its financial debacle.  Among other things, Hamilton was – what would today be called – a first-class financial engineer.  He established a federal sinking fund to finance the Revolutionary War debt.  He also engineered a large debt swap in which the debts of individual states were assumed by the newly created federal government.

Fothe full story on Hamilton why his removal from the $10 bill is no big loss see: Hamilton's Curse: How Jefferson's Arch Enemy Betrayed the American Revolution--and What It Means for Americans Today by Thomas Dilorenzo.

From the blurb:

Two of the most influential figures in American history. Two opposing political philosophies. Two radically different visions for America.

Thomas Jefferson and Alexander Hamilton were without question two of the most important Founding Fathers. They were also the fiercest of rivals. Of these two political titans, it is Jefferson—–the revered author of the Declaration of Independence and our third president—–who is better remembered today. But in fact it is Hamilton’s political legacy that has triumphed—–a legacy that has subverted the Constitution and transformed the federal government into the very leviathan state that our forefathers fought against in the American Revolution.

How did we go from the Jeffersonian ideal of limited government to the bloated imperialist system of Hamilton’s design? Acclaimed economic historian Thomas J. DiLorenzo provides the troubling answer in Hamilton’s Curse.

DiLorenzo reveals how Hamilton, first as a delegate to the Constitutional Convention and later as the nation’s first and most influential treasury secretary, masterfully promoted an agenda of nationalist glory and interventionist economics—–core beliefs that did not die with Hamilton in his fatal duel with Aaron Burr. Carried on through his political heirs, the Hamiltonian legacy:

• Wrested control into the hands of the federal government by inventing the myth of the Constitution’s “implied powers”
• Established the imperial presidency (Hamilton himself proposed a permanent president—–in other words, a king)
• Devised a national banking system that imposes boom-and-bust cycles on the American economy
• Saddled Americans with a massive national debt and oppressive taxation
• Inflated the role of the federal courts in order to eviscerate individual liberties and state sovereignty
• Pushed economic policies that lined the pockets of the wealthy and created a government system built on graft, spoils, and patronage
• Transformed state governments from Jeffersonian bulwarks of liberty to beggars for federal crumbs

By debunking the Hamiltonian myths perpetuated in recent admiring biographies, DiLorenzo exposes an uncomfortable truth: The American people are no longer the masters of their government but its servants. Only by restoring a system based on Jeffersonian ideals can Hamilton’s curse be lifted, at last.

-RW