'87 Sir

Thirty years of service ----USNA Class of 1987 '87 Sir

Monday, February 4, 2013

Economic History--Paul Krugman should read this....

So, I picked up this little book to educate myself on American economic history since that is a serious knowledge deficiency and I hate deficiencies.  It is a small and easy to read volume, but really does an outstanding job of stitching together the economic history of America and showing the very real relationship between business, politics, the law, and society to show how a mere 13 colonies started along a narrow strip on land could become the most dominant economic power in history.

The story of how the colonists were able to financially organize themselves after the Revolution and the Ratification process of the Constitution (you know that archaic document that liberal progressives HATTTTEEE) to pay of the tremendous debts of the colonies was a tremendous tale of economic and political genius....it would seem Alexander Hamilton could teach modern bankers and economists a thing or two.

What I particularly enjoyed about this book was Gordon's ability to show the interconnectedness of new American inventions and industries.  For example, the development of reliable gas lamps  in the mid-1800s to provide safe and reliable light to American homes for their evening activities not only allowed Americans to extend their day, it gave rise to the explosion of newspapers and magazines that developed the American publishing industry.  Another seemingly obvious relationship was the rise of the steel industry and railroads to the rapid connection of American towns and cities and the explosion of commerce in the late 1800s as farmers and other business could get their goods to market faster and cheaper.

The most interesting chapters were those dealing with the era of the "Robber Baron"--Carnegie, Rockefeller, J.P. Morgan and the other titans of that era.  I was particularly fascinated by the tale of how J.P. Morgan PERSONALLY kept the US Government solvent back in the late 1800s when one of the frequent depressions nearly bankrupted the US Government....pretty amazing stuff...kinda like Warren Buffet bailing out the Federal Reserve...and how J.P Morgan was able to keep the cats herded on Wall Street and throughout the major US banks to make his plan work...can you imagine that happening today...WOW would those Occupy Wall Streets foam at the mouth.....

I think Gordon is a LITTLE too in love with the idea of a National Bank to regulate the nation's financial system and but I agree with him that the Federal Reserve works best when it is trying to keep a stable money supply and should be VERRRY cautious about trying to tweak the economy or promote social engineering....something our current Bernanke fellow should heed....trying to micromanage the economy be inflating the money supply is not a good plan....as anyone with half a brain who goes to the grocery store can tell....but apparently not HIGHLY educated government economists who tell us HEY, there is no inflation problem...who you gonna believe me or your wallet...silly little peasants.

But that is a minor nit...overall I thought this book is an excellent introduction to the layman economist to understand how our country was able to innovate, build, dream and prosper over 200 years. 

Whether we will make it another 4 remains to be seen......

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