Friday, May 8, 2015

Thomas Klitgaard and James Narron — Crisis Chronicles: The Man on the Twenty-Dollar Bill and the Panic of 1837

President Andrew Jackson was a "hard money" man. He saw specie—that is, gold and silver—as real money, and considered paper money a suspicious store of value fabricated by corrupt bankers. So Jackson issued a decree that purchases of government land could only be made with gold or silver. And just as much as Jackson loved hard money, he despised the elites running the banking system, so he embarked on a crusade to abolish the Second Bank of the United States (the Bank). Both of these efforts by Jackson boosted the demand for specie and revealed the soft spots in an economy based on hard money. In this edition of Crisis Chronicles, we show how the heightened demand for specie ultimately led to the Panic of 1837, resulting in a credit crunch that pushed the economy into a depression that lasted until 1843.
FRBNY — Liberty Street Economics
Crisis Chronicles: The Man on the Twenty-Dollar Bill and the Panic of 1837
Thomas Klitgaard, vice president in the Federal Reserve Bank of New York’s Research and Statistics Group, and and James Narron, senior vice president in the Federal Reserve Bank of San Francisco’s Cash Product Office

2 comments:

Septeus7 said...

It is nice to see some proper discussion the horrible legacy of Andrew Jackson but I believe the author is still treating Jackson with kid gloves. He was a horrible British pawn and genocidal racist maniac.

The article doesn't mention the role of the British Barring Banks who cleaned up after the National bank was destroyed. It doesn't mention the fact that Jackson was creation of Aaron Burr's (the British spy and traitor) political network. It doesn't mention that destruction of the National Bank destroyed the infrastructure projects that would have industrialized the South and likely ended slavery without a Civil War.

Almost all of the USA's problems can be traced to that stupid British Imperialist pawn. Andrew Jackson is the perfect example of just how easy a reactionary is controlled by the very forces he claims to oppose.

The problem with US is that Reactionaries/Conservatives are stupid; Liberals/Libertarians are evil and Leftist/NewDealers/Unionist/RadicalRepublicans are all dead.

A British colony like the United States didn't cease to be colony because of its independence and until Americans awake and understand that they need to finish the Revolution they are not free. The biggest lie in our country is that we are a free nation.

On another topic, I'm actually curious of what Tom Hickey thinks of Oswald Spengler versus Arnold J. Toynbee.



Tom Hickey said...

On another topic, I'm actually curious of what Tom Hickey thinks of Oswald Spengler versus Arnold J. Toynbee.

I don't think much about either Spengler or Toynbee. IMHO, they are anachronistic now, products of their own time, culture and their place in it. They are products of 19th and 20th century Western intelligentsia that are probably as indicative of that class of people as of history. For example, Spengler is typically German and Toynbee typically British. Neither can escape that.

While I am in awe at the scope and scale of German intellectualism, it doesn't pass the scientific smell test. Spengler's notion of a civilization as super-organism is fanciful although he makes good use of it as a model. Similarly, Toynbee exhibited a bourgeois English attachment to religion. A historian with a scientific or engineering background might see it in terms of technology.

While they provide interesting methodological insights for developing a theory of history, since that is the issue they were grappling with, I don't believe in theory of history as such. In my view this study more properly falls under sociology and anthropology if it is to be considered scientific. Randall Collins, Macrohistory: Essays in the Sociology of the Long Run would be an example. He sees much Western historiography as largely ideological and polemical in light of investigation.

It's not the business of historians to impose their theory on history and then interpret history to fit it. That's just to produce one possible explanation among many other possible explanations that may sound appealing but don't generate testable hypotheses and are only "corroborate" after the fact by ad hoc evidence selectively brought forward ad hoc.

Not to say that all fundamental assumptions of historical theories are necessarily wrong-headed, but only that they are inadequate to build a comprehensive explanation of history on that can be shown to be a representative model based on criteria that are scientific.

Otherwise it is a matter of matching one's own biases with the biases of some writer or theorist.

My way of thinking about history is 1) dialectical from Hegel's methodology although I would relate it more closely with Oriental thought, especially Taoism, 2) globally systematic, similar to Immanuel Wallerstein and Kenneth Boulding, and 3) cosmically cyclical, similar to P. R. Sarkar.