"Hamilton's Growth Strategy" Touted in New York Times Op-Ed
November 13, 2012 • 1:44AM

In a strikingly rational analysis printed in the November 11th New York Times op-ed section, penned by the recently deceased Prof. Thomas R. McCraw of Harvard, First Treasury Secretary Alexander Hamilton's method of "bankruptcy reorganization" for the U.S. economy is laid out in some detail. While reflecting a fundamental weakness in the understanding of the source of economic value, this analysis is the closest yet to that of the LaRouche movement to appear prominently in print.

McCraw notes that Hamilton faced a far worse financial crisis than the U.S. does today (according to his figures, that's true), and proceeded to avoid the disastrous "higher taxes and/or austerity" approach which today's political and economic class is has chosen. Instead, Hamilton chose to "create a climate of predictability and promote the release of pentup economic energy," i.e. create the conditions for economic growth.

McCraw then reviewed what Hamilton did in consolidating and reorganizing the nations' debts, and then turning them into long-term credit, through the creation of the Bank of the United States, in order to "increase the total amount of industry and opulence [I don't recall ever seeing this word in Hamilton, but perhaps?-nbs], is ultimately beneficial to every part of it."

So far, so good. He's shown how a solution can be reached without resort to austerity or politcally repulsive taxes. The weakness lies in his obvious unclarity about the real nature of the Bank (which he describes accurately as private, profit-making but never discusses in relation to his governmental function), and the actual basis for national wealth.

McCraw's confusion on the basis for national wealth is shown when he says Hamilton was willing to "promote growth by whatever means possible" (not true—he opposed speculation vigorously as opposed to the general welfare), and compares Hamilton's creation of increased federal income based on economic growth to the bubble decades of the 1980s and 1990s.

But, no question about it, this oped forms a good start for a rational discussion—as compared to the insanity swirling around us today.