''He smote the rock of the national resources and abundant streams of revenue gushed forth. He touched the dead corpse of the public credit and it sprung upon its feet.''
You will find these words on a statue of Founding Father Alexander Hamilton located outside the US Treasury Building in Washington DC.
These two lines sound as if they come from an old poem. (Well, not completely - the “abundant streams” part sounds rather contemporary, perhaps as a reference to the Obama Administration’s gushing deficit spending policies.)
In fact, they were originally spoken by statesman Daniel Webster. Webster delivered them as part of a tribute to Hamilton’s skill, as the first US Treasury Secretary, in stabilizing the finances of the United States following victory over Britain in the War of Independence.
Today, given America’s economic difficulties, it’s easy to lament that Hamilton cannot be brought back to life and given back his old job at the Treasury Department again. All those depressing headlines would surely cease if Hamilton could once again touch “the dead corpse of the public credit” and revive it.
Hamilton died exactly 206 years ago this week. As many of his biographers have observed, despite the passage of time, he stands out among American public figures for his almost supernatural ability to (a) grasp the key aspects of the difficulties facing the country and (b), as if by intuition, creatively and optimistically sketch out what must be done, on a national basis, to overcome those obstacles.
While Hamilton himself cannot be brought back from the dead, Americans in 2010 fortunately have his many thoughtful, nationally-minded writings on policy questions to draw on for inspiration – such as his Report on Public Credit, or his many contributions to the Federalist Papers.
Another example of Hamilton’s sharp intuition and national orientation can be found in his 1791 Report on Manufactures, in which he urges his fellow Americans to make their new country into a center of industry.
The 1791 document points to one difference between Hamilton and America’s leaders in 2010. We can only wonder what kind of harsh words Hamilton would use to describe the current mania among politicians for subsidizing trendy, gimmicky industries like say solar panels, wind farms and so on. If he sprang to life in 2010, the hyper-practical Hamilton would want to know what was being done to strengthen the US edge in strategic “hard” industries like car-making, steel-making, aerospace, ship-building, etc. He’d likely argue that those industries are much more important in terms of the national interest.
While there’s no explicit revival of Hamilton’s ideas just yet, there’s a strong Hamiltonian flavor to many of the more interesting ideas in circulation about how the US can escape the Great Recession through a national economic renewal.
Economist James Galbraith’s proposals for creating new financial institutions to pump credit into the national economy come to mind. One can imagine Hamilton, father of the First Bank of the United States, smiling and nodding at Galbraith’s argument for a “national infrastructure bank.”
Hamilton’s bold ideas and national orientation helped revive the US economy once before. Given a chance, that combination can succeed brilliantly a second time.