U.S. History

The government sets price its flu shot at zero and then wonders how to account for shortages. That's just the beginning of the long history of government errors concerning the flu, writes William Anderson. In the flu pandemic of 1918-1919, an estimated 500,000 Americans died of Spanish Influenza. The outbreak coincided with the last days and the immediate post-armistice days of World War I, with government actions guaranteeing that the flu would spread rapidly.

Before the Fed blessed this country with unlimited liquidity, American history saw two previous attempts at creating a centralized institution of money and credit: the First and Second Banks of the United States. Both generated financial havoc, and were rightly opposed by the champions of freedom and sound money. Historian Scott Trask explains.

The American people have not seen widespread bank runs since 1933. In that object at least, the Federal Deposit Insurance Corporation has succeeded. But Scott Trask asks: at what cost? To insure deposits is to invite bad banking—and worse; it is to foster reckless speculation and unsound investments, help make inflation permanent instead of intermittent, obstruct the curative powers of economic contractions, and divorce freedom from responsibility.

Morgan Reynolds: "When the Bush administration took office in January, 2001, a downturn was already underway. The president and his coterie said so and blamed Clinton, but then hushed up. That was a mistake—a dose of truth about the economy would have worked better—but they learned an early lesson about psychology and confidence in Washington, D.C. Politics is all about (the) confidence (game) and prestige in the nation's capital."

Since the early 17th century, American governments (colonial, state, and federal) have tried and failed to restart business expansions by reflation, writes Scott Trask. But new money in the system is no substitute for genuine production. It is too early to see the long-run consequences of the Bush-Greenspan reflation, but if the past is any guide we can expect the next decade to more resemble the 1970s than the 1990s.

The disappearance of gold from the monetary scene is perhaps the most tragic economic calamity to befall the world of money in the twentieth century, writes Christopher Mayer. Views on gold in the first two decades of the twentieth century compared to those held today could scarcely be more different.

During the 1920s and 30s, a majority of Americans came to believe that our involvement in World War I had been a horrendous mistake. The war was supposed to make the world safe for democracy,

Thomas Fleming’s outstanding book poses a fundamental problem. Fleming shows that Woodrow Wilson led America into an unnecessary war. 

The tax bills of many American families are falling during a period of exorbitant increases in federal spending due mainly to war and welfare spending. Odd? Not once we discover the record levels of government debt accumulation. It's the shell game of government finance at work.

H. Scott Trask sums it up: on the one hand, they believed in fractional-reserve banking, generally following Adam Smith's currency and banking theories. On the other hand, they were resolutely opposed to government-issued paper money, fiat money, legal tender laws, inconvertible paper currency, and land banks. On the question of a national bank, they were divided.