The Second Bank of the United States sounds boring. It’s a bank, after all, so how interesting could it be? Well, more interesting than you’d think. This national bank was established when the U.S. was in its infancy. It took on the role of national creditor, putting it at odds with the banks established in all of the states. It could establish regulations for money and credit, and did so for its own purposes. This meant everyone who dealt in money and credit had to accommodate this national animal. Sound familiar? President Andrew Jackson hated the idea of a national bank. He saw such entities as nothing more than an easy path for governments and large institutions to manipulate currency for their own gain. He vowed to close the bank… and succeeded. The demise of the bank set off a credit contraction that deflated a speculative bubble, resulting in a sharp economic downturn in the mid-1830s. Many people point out that if Jackson had not closed the bank then the contraction would not have happened, but this misses the point that the expansion was based on the extension – and some would say reckless extension – of credit. Sound familiar? Should there be a Bank of the United States? Should the Federal Reserve exist? Should there be ONE body that can determine, free of voter approval or oversight, whether the national currency we are required to use can be devalued? Should there be an entity that can exert worldwide influence by simply deciding what short-term interest rates should be and by pursuing programs to change long-term interest rates? These questions are hotly debated today, just as they were in the 1800s, but not by as many people as they should. People who are knowledgeable about such things constantly question the wisdom of consolidating power, while recognizing that it can allow for swift action in times of need. Given the recent actions of central banks around the world and how they affect all of us through our pocketbooks, it would seem reasonable that such topics arise at cocktail parties, little league games, and really anywhere that people gather. But they don’t. Instead, such conversations are relegated to financial papers and gatherings of like-minded people. Maybe that’s the way the winners of the bureaucracy – those who decide what gets displayed and what doesn’t – want it to be. Maybe that’s why the building that housed the Second Bank of the United States holds no record of what went on there… of how a fight over money and credit was waged. But you can see a cool portrait of the Marquis de Lafayette, as well as signers of the Declaration of Independence. Laying out the reasons for and against a national bank might actually help to spark a national conversation about where we are and how we function. Displaying portraits of people from the 1700s simply gives us something to look at before we move on to the next historic site. Rodney Johnson
Posted on: Wed, 26 Jun 2013 02:47:19 +0000
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