Hamilton Everywhere, All the Time

By James Kwak

Alexander Hamilton is a big deal these days. Apparently there’s a musical about him—something I only found about when I saw Lin-Manuel Miranda’s Rose Garden video on Twitter (which tells you something about my relationship to popular culture). In their new book (on which more later), Jacob Hacker and Paul Pierson invoke Hamilton to defend their vision of an interventionist government and a mixed economy.  And Stephen Cohen and Brad DeLong have titled their new book Concrete Economics: The Hamilton Approach to Economic Growth and Policy.

I like to think that Simon and I were on the leading edge of this mini-trend when we featured Hamilton in our 2011 Vanity Fair article and in White House Burning. But it’s no surprise that people turn to Hamilton today, when what used to be known as the Tea Party (now simply the Republican Party) dreams of recreating a libertarian founding moment that never existed. Hamilton stood for a (relatively) strong central government, deficit spending, and what would now be called industrial policy, all with the intent of fostering economic growth.

Concrete Economics is less about Hamilton’s particularly approach to economic policy than about an overall attitude of which Hamilton cited as an exemplar: in short, a pragmatic rather than ideological approach to policymaking, one which used government resources and power to pursue specific goals. The best contrast is between the Republican Party c. 1955—which used state power to suburbanize the country, build up the military, and spin off the technologies that turbocharged productivity growth—and the Republican Party of the past 35 years, which (along with a considerable amount of Democratic abetting), which slashed government spending and deregulated the financial sector for ideological reasons (free flow of capital, free markets, blah, blah, blah).

If Cohen and DeLong are right about the broad course of American economic history, then the big question is why the we had this major transformation in overall attitudes toward policymaking. There are two major ways to think about this historical shift. One is to look at the ideas involved: maybe what happened is that people suddenly started believing “neoclassical” economic theories about the benefits of free markets (particularly for capital) and small government, and then acted on those beliefs. The other is to look at the who benefited: financial institutions, financial professionals, corporate executives, and rich people generally all stood to gain from lower taxes, smaller government, and financial deregulation. Superstructure, base.

The truth, I think, is that both stories are true. We have had a major ideological shift since the 1950s, from the idea that the government can play a positive role in influencing economic development, to the idea that government is either evil and incompetent and free markets can solve all problems. As Dick Armey (remember him?) said, “The market is rational and the government is dumb.” This naive belief that the simple results people remember from Economics 101—supply and demand interact to maximize social welfare—actually apply in the real world has produced decades of bad policies, and continues to be spouted by the Paul Ryan wing of the Republican Party. But the rise of that ideology did not happen by itself; it was organized and funded by wealthy businessmen, large corporations, and conservative foundations, as amply documented by historians such as Kim Phillips-Fein, Gareth Stedman Jones, Elizabeth Fones-Wolf, and many others.

To turn the tide, it won’t be enough simply to tell people that they should be more practical and less ideological. Powerful interest groups have to decide that they would be better served by different policies based on different ideas. There are glimmers of hope that that might happen in particular areas; for example, the corporate sector may be very slowing coming around to the idea that destroying the planet may not be so good for future profits. But on the whole, the very wealthy—who basically control the American political system—seem to be happy with the way things are. Which is one indication that things are unlikely to change anytime soon.

11 responses to “Hamilton Everywhere, All the Time

  1. “The truth, I think, is that both stories are true.”

    Yes, but the second story (that there are powerful political forces and private incentives at work) is much truer than the first story (that there’s been an ideological shift).

    “To turn the tide… Powerful interest groups have to decide that they would be better served by different policies based on different ideas.”

    I’m skeptical. If all those powerful interest groups can coordinate with one another to form one single lobbying voice, then I guess this would be rational. But I just don’t see them having the capability to organize like that. So companies will continue to operate with the assumption that nothing will change policy-wise, that the private costs of environmental degradation will stay under the public costs, and they’ll continue with the status quo.

    Personally I think the best hope is for “powerful interest groups” to no longer exist. This is the crux of everything, if you ask me. You might say that’s overly idealistic and impractical, to which I’d say otherwise we are resigning ourselves to the fact that public policy does not reflect the wishes of a democratic electorate. Can’t accept this.

    Love this blog, even in its more sporadic form. :)

  2. The big problem is once policy is on the wrong side of nature, only bad things can and will happen. This country has been on the wrong side of nature for many, many decades, and shows no hunger for being on the right side of nature, the leaders are in essence, lost in time and space.

  3. https://en.wikipedia.org/wiki/Paradox_of_nihilism

    http://www.ozy.com/flashback/that-time-the-cia-secretly-dosed-americans-with-lsd/68782?utm_source=HF1&utm_medium=pp&utm_campaign=pp

    Mentally ill – they do not realize that their rationalizations, born of imagination (greed is good), are current “economic theory” and have ziltch to do with gravity and biology and the physics of both.

    They are nutz. No one has a DUTY (the only role of GOVERNMENT is to protect the INDIVIDUAL against force and fraud) as a free will being to be lorded over by psychotics

    This is the “truth” that has been “born again” this election cycle – from Declaration of Independence:

    “…..a decent Respect to the Opinions of Mankind requires that they should declare the causes which impel them to the Separation….”

    Cause #1 – crazy sadistic inhuman “isms” with the motive being TAKE IT ALL.

    Btw – need a constitutional amendment – the HUMAN right to PRIVACY….

  4. Check out the protests now happening in Paris and other major cities…Its the younger generations stating they figure out their government’s agendas and they’ve decided no more….now and in the long-term future, politics is to include them and so too, policy-making…..See sources —-discussion on Al Jazeera’s, ‘Inside Story’ 30 discussion series–

    -Also see bilaterals.org for breakdown of all global trade agreements to find out how, corporations are finally dumping all their costs, as well as stealing through procurement take-over, of all public services and programs……Another area of interests, is the inserted clauses for bank bailouts and bail-ins in every country’s budget.

  5. «from the idea that the government can play a positive role in influencing economic development, to the idea that government is either evil and incompetent»

    That seems to me the usual very popular right-wing framing in which so many people seem complicit, including our blogger here.

    To me the it seems that the issue has never been the size or efficiency of government, as there are plenty of right-wing advocates of big, intrusive, bureaucratic government.

    The real issue is redistribution from the currently wealthy to the currently poor, and the right wing partially correctly thinks in current circumstances that a big government will do more redistribution from currently rich to currently poor, so they fight that.

    They don’t fight Social Security or Medicare or unemployment insurance, etc., because they are big, intrusive government policies, but because they involve a (small) level of redistribution from currently rich to currently poor.

    There are plenty of intrusive, big government policies that the right wing advocate, but they are all about giving the currently rich more control over the currently poor, or redistributing from the currently poor to the currently rich, like driving house and other asset prices up.

  6. Okay folks, there a new plan made up by some new feller,[ And let me frankly state that I was really wondering who it was that provided you all with this latest Stay of Execution, I could see NO reason to carry this charade on any further than it had already gone. Granted, I was responsible for the past couple decades, I take credit for that, but this latest stay not even I could believe, and I refused to take credit for it, I did not want it in any way shape or form, I was against it, yet some how it arrived out of no where.

    So here goes, they said he is a creator of ulcers down under, and he’s very good at what he does, and that this is needed at this time, i’m not sure who the feller is, but i do know we’re in no position to deny him. He says there is a train arriving, the 835, there are going to be 5000 billy goats, and me, on the train. Now the billy goats are to be met by satan,(by now everyone knows who he is) and are to get operated on, payed for by the nearly extinct middle class American tax payers I might add, and then the billy goats are to be sold at mkt by satan with the devils approval, this has all been approved in the judges chambers for nefarious reasons, (a hands down under the table transaction since satan is as blind as bat when not using his formula of straight a’s and phd’s to line the pockets of law makers and judges). Now after the b fkng operation, the devil (lets call her little suzie) is going provide the paper work for the sale at auction of the billy goats, a hefty sum indeed, for she also has a formula [one which has never occurred in the whole history of the universe (a direct confliction of service-vs-health ISSUE), making it a win win on her side no matter what, FOR NOW] for success that she won’t deny us, which will be applied here also.

    Now after the auction the billy goats are to be reloaded back on the train to their destination, crack whipped if need be to get them all on board, and then head for pettycoat junction where they will be off loaded to their final destination. Now the kicker is they have to cross the youngstown bridge on their way to pettycoat junction, but they are not going to make it across that bridge—, because me and my cousin will be dynamiting the bridge and will blow it up as they cross. Now the devil will be waiting on the other side of the bridge to radio ahead that all is well of the arrival of the 5000 billy goats and satan, but once the train falls into the river below she will need a ride out of the valley and to the city, cause the goats and satan are not going to be arriving at pettycoat junction. Me and my cousin are not going to provide the service to get her to the city either,(she’ll have to make that herself) and instead we shall take a raft down river and grab a cab to a waiting limo drivin by the feller who can’t be denied the 835. There he brings the 3 of us to a place that houses the devils twins daughters, 2 beautiful creatures whom the devil was not responsible enough to raise herself, and who have been left alone to read and study by themselves for 21 lonely years, tended to by the feller who won’t be denied his one, (last), chance at success. He then leaves and we have a private party while their others run parentless and wreckless amongst the public citizens to be used and abused by the derivatives of what now has been proved to be a rather satanical gvt, just one without satan this time.

    [And that’s if we have the tools to require us to be able to meet at that special place, which is questionable because nothing has lasted the test of time, and that is what humanity is dependent upon, so lets just think about this now, since everything of significance has been invented between 1870-1970, and was done correct enough until1970,(on the basis if you can land a man on the moon and safely bring him home, you have done everything you really need to do) only slight improvements are required, instead we have had to redesign everything rather than slightly improve on it, (compliments of satan and his tribe infinite fools), and to prove this we have seen that NOTHING lasts the test of time, always needing improvement every 2 or 3 years or so, [look how many time computer operating systems have needed to be replaced because of defects, computers, made and run by bad people, only become the bad problem people are dependent upon, so this is a unnecessary step in the evolution of mankind, picked up and demanded upon by satan and his tribe of wicked men, which are the latest and greatest of blunders controlled by him. So if you associate or do business with him, you are the problem of humanity.]

    Now you all do the math, study the timing, and prepare yourselves for the complete and utter total destruction of the tragic American middle class, for that is all there is left of this wicked world that has been created, to be torn down, and recreated in the devils likeness (with tits up this time) naturally. Wish us well, it’s going to be a bumpy and expensive crap shoot of a ride.

  7. Deleting 90 million out of 300 million from the virtual reality nodule through corp IT/HR departments was the “congolese” method. Pure savagery. Wait in the bushes outside the village until the harvest has been collected, then ambush the villagers, kill every one of them and live in the village off their fruits until the fruits are all gone. Then rinse and repeat.

    Lock and load.

  8. The new “urantia” secret code word for their economic suck out is “Soul”. Truth, beauty and goodness are the methods for re-rigging the spin.

    The constant churn of iniquity in time – the everlasting NOW distributed throughout space (truth of physics) – is the “religious” power of the Shamans of Gizmology ala their majik internets and clouds.

    Worst priest class, yet, to torment humanity. And it is not a “crime” this “time” around.

  9. As I found –there is no way I can leave any kind of comment–Its not wanted and all efforts to sign in are erased.

    On Tue, Apr 19, 2016 at 6:00 PM, The Baseline Scenario wrote:

    > Annie commented: “The new “urantia” secret code word for their economic > suck out is “Soul”. Truth, beauty and goodness are the methods for > re-rigging the spin. The constant churn of iniquity in time – the > everlasting NOW distributed throughout space (truth of physics) ” >

  10. Marg, perhaps you have sign in under the silver plan, it takes 2 months to get approved for that one.