Hi, Alexander Hamilton here. Okay, I’ve been dead since 1804, but I still keep up with things.
And so, for example, I was amused to see groupon.com, the online daily deals company, touting a special deal, offering customers $10 off on their next purchase. That’s $10, as in, the ten-dollar bill. As the genius copywriters at Groupon put it, “The $10 bill, as everyone knows, features President Alexander Hamilton–undeniably one of our greatest presidents and most widely recognized for establishing the country’s financial system.”
Oops. First off, I was never president. Maybe I could have been elected, maybe I would have been elected–it was stupid of me to get into that duel with Aaron Burr, which left me dead at age 49–but it never happened.
Second, while I am responsible for “establishing the country’s financial system,” I was responsible for much more than that. As the nation’s first Treasury Secretary, I worked with President George Washington to establish, in 1791, the Bank of the United States. And even more importantly, I helped establish the destiny of America, to become the world’s leading military and industrial power.
So I was a financier, yes, but I was a builder, not a speculator. I wanted to use money to create manufacturing, not just to gamble it. That’s why I am irked that one of my latter-day successors at the Treasury Department, Robert Rubin, invoked my name to create the Hamilton Project at the liberal Brookings Institution, which pushes Clinton-Obama-type neoliberal policies. You know, the sort of post-industrial policies that give us bubbles, which are then followed by bailouts. Such policies are great for, say, Goldman Sachs; it’s perhaps not coincidental that Rubin worked there for a quarter-century, rising to the top of the company.
As for me, I was never a bailout artist, I was a nation-builder. So since Groupon brought up my name–and promoted me to the White House, in fact–let me tell you about a better deal. That is, what a President Hamilton would be doing today.
The first thing I would do is recognize that while the government is not a particularly competent player in the free market, government can, in fact, create the framework for the market itself. That is, without such governing framework, the market wouldn’t even exist. And by this I don’t just mean enforcing contracts and policing banditry; I also mean creating the cultural, political, and physical space in which markets are able to exist. A free market in a wasteland isn’t much of a market.
Yet before I get to a contemporary application of my thinking, perhaps I should step back and tell you more about myself–and about the founding of America.
Creating the United States and then defending it–those were the big ideas that animated my adult life. Americans live in the USA, as opposed to England Jr., because we a) liberated ourselves from King George III, b) formed a union of the 13 colonies, and c) guarded our independence ever since. The motto of the US Army puts it well: “This we’ll defend.”
Speaking of the US Army, I was in on the ground floor. In 1775, the year before the Declaration of Independence, when I was 18, I joined a pro-independence New York City militia; we called ourselves “Hearts of Oak” and wore hatbands inscribed with the words “Liberty or Death.” The following year, 1776, I joined the New York Provincial Company of Artillery. That unit, I might note, still exists today; it’s the US Army’s 1st Battalion, 5th Field Artillery.
That same year, I became General George Washington’s aide-de-camp. For most of the next five years, through victories and defeats, I was at his side, helping the great leader by managing the staff work and correspondence of the Continental Army.
Yet I thirsted for glory in battle, and so, in 1781, I left HQ to take command of an American battalion on the front line. At Yorktown, on October 14, 1781, I led a nighttime attack that captured a British redoubt; it was the turning point in that climactic battle. The British army under Cornwallis surrendered five days later, and the Revolution was won.
I learned a lot from my war service: the importance of courage and steadfastness for sure, but I also learned the importance of logistics and materiel. To put it bluntly, the English, then riding the wave of their Industrial Revolution, were better equipped than we were. The American soldiers didn’t lack for bravery, but they had a serious problem with firepower.
General Washington agreed with this assessment, and then President Washington resolved to do something about it. In his January 8, 1790, Message to Congress, Washington outlined the needs of “a free people,” focusing on the imperative of military production. Referring to the American people, The First President declared, “Their safety and interest require that they should promote such manufactories as tend to render them independent on others for essential, particularly for military supplies.” In other words, the US could not rely on other countries for its defense capacity.
So as a member of Washington’s Cabinet, I went to work on fixing this problem. Fixing it, that is, by seeking to build up American industry. On December 5, 1791, I submitted my Report on Manufactures to Congress and, in the very first paragraph, made my intentions clear–that the US must industrialize in order to insure its independence:
The Secretary of the Treasury…has applied his attention…to the subject of Manufactures; and particularly to the means of promoting such as will tend to render the United States independent on foreign nations, for military and other essential supplies.
I deliberately used the word “independent,” echoing my superior, President Washington. For the acquisition of military supplies, the United States must be independent of foreign nations. Always interested in commerce, I favored expanded foreign trade–but not if such trade came at the expense of US national security. And so what I wrote in 1791 is just as true today:
Every nation ought to endeavour to possess within itself all the essentials of national supply. These comprise the means of subsistence habitation clothing and defence. The possession of these is necessary to the perfection of the body politic, to the safety as well as to the welfare of the society.
I then summoned up a painful reminder, from our own national memory of the Revolution:
The extreme embarrassments of the United States during the late War, from an incapacity of supplying themselves, are still a matter of keen recollection.
That is to say, for want of the needed war materiel, we could have lost our bid for independence.
So you see, my Report was intended, first and foremost, as a national security document; I knew that America could never be fully secure if it was, in fact, reliant on Britain, or any other foreign power, for vital war materiel.
So that’s where I’m coming from. Freedom doesn’t mean a thing if you can’t defend it. And there will always be threats to freedom, from King George, the Kaiser, Hitler, the communists, the ayatollahs, and the hybrid red-capitalists in Beijing.
Indeed, the business of steering the destiny of a great nation, I declare, comes before any other business. So yes, I was into finance, but I always thought manufacturing was more important. And a key to manufacturing, of course, is infrastructure. So in my day, I was a big proponent of roads, ports, and canals. And if I’d been around longer, I would’ve championed railroads, too. And then the telephone, TV, the Internet–everything. All state-of-the-art infrastructure is important and valuable; you simply can’t have a modern economy without it.
Oh, and one other thing: water. Pipes and pumps for fresh water–for drinking, washing, irrigating, manufacturing–are just another kind of vital infrastructure. So while humans can’t stop droughts from occurring, they can stop droughts from being devastating.
So now let’s apply this wisdom to a contemporary problem–the drought in California. Yes, California became a state nearly half a century after I died, but as I said, I manage to keep up. And what’s happening out there proves a point I made earlier: Sometimes it takes the government to create the market.
Much of the development of the American West was made possible by water. And that includes California, whose population has jumped from less than 100,000 in 1850 to nearly 40 million today. To see how California got the water it needed, the reader might Google “Owens River” and “Hetch Hetchy,” and then click around on hundreds of lesser projects, most of which involved bringing water from the mountains on the eastern side of the state to the coastal areas to the west.
Yes, it was a corrupt and sometimes brutal process–I’ve seen the 1974 Jack Nicholson movie Chinatown, and you should, too, because it’s quite entertaining–but then, just about everything in history is corrupt and brutal, if you look too closely.
Yet if California doesn’t have plenty of water, then there won’t be any farming in the San Joaquin Valley, or, as it’s also known, the Central Valley. The Valley was dry before, and not productive, and then the government came in, built water infrastructure, irrigated the land, and it thus became the leading agricultural hub in the nation. In other words, the farmers did well–once the state had established the right environment. Did these infrastructure projects cost money? Of course. But that money was paid back many times over, in economic growth that would not otherwise have occurred; little revenue comes from dry land–big revenue comes from abundance.
And now that the state has turned off the water spigot–to protect various endangered species and to advance other elite environmental concerns–the area is drying up again. In other words, a second “dust bowl.”
Environmentalists hail this creeping desertification as a perverse kind of progress, but I call it regress, back to the days before modernity and prosperity. That’s why we Hamiltonians favor, instead, the policy of taking positive steps to grow food, and to grow the economy.
Yet in the meantime, reacting to these new arid conditions, the free market has concluded that farming isn’t so valuable anymore. And that’s that: farms shrivel up, jobs are lost, and property values fall–a loss for everyone in the area. And without an active plan for bringing the water back, there’s no reason to think that the depressed situation will reverse itself, ever.
So here’s my question: Wasn’t the Central Valley better off when the government was trying to help? Isn’t the country as a whole better off when the state sets up farming to succeed, not fail?
As Victor Davis Hanson, a native of Fresno, California, notes,
The vast 4-million-acre farming belt along the west side of the Central Valley is slowly drying up. Unlike valley agriculture to the east that still has a viable aquifer, these huge farms depend entirely on surface water deliveries from the distant and usually wet northern part of the state. So if the drought continues, billions of dollars of Westside orchards and vineyards will die, row cropland will lay fallow, and farm-supported small towns will likewise dry up.
And as Hanson also notes, the post-industrial liberals along the coast, from Santa Monica in the south to Marin County in the north, have blocked the sorts of new infrastructure development that would bring needed water to California. Indeed, in the words of Rep. Doc Hastings, Republican of Washington State and chairman of the House Committee on Natural Resources, the situation in California is a “man-made drought.”
Yet of course, one politician’s crisis is another politician’s opportunity. On Friday, President Obama traveled out to the afflicted Central Valley, declaring that the real issue was not water, but, rather, global warming. And so he pledged $183 million in various kinds of conservation funds–the Drudge Report called them all “slush”–for various projects.
And to complete the circle of cynicism, only in the fine print do we discover that the $183 million isn’t “new” money, it’s just repurposed money–passed from some old pot to this new pot. So in other words, we needn’t worry too much about government “austerity” biting too deeply; when the President needs to, he can always find $183 million lying around. Still, give the Obama administration credit for political shrewdness; hard-hit Californians may think of that $183 million as manna from Uncle Sam.
But wait–as those clever wordsmiths at Groupon might put it–there’s more! Obama also announced that he’s asking Congress for another $1 billion for “climate resiliency” programs. Translated, that means more rationing, plus a little propaganda.
One Republican was explicit in his denunciation of all this foolishness. “Global warming is nonsense,” said California GOP Congressman Rep. Devin Nunes (R-CA) to The New York Times, and, amazingly, the Times printed his words. Nunes added that the feds were diverting what scarce water there was for the sake of freshwater salmon. “There was plenty of water,” Nunes noted, adding, “This has nothing to do with drought. They can blame global warming all they want, but this is about mathematics and engineering.”
Reacting to the new “climate resiliency” fund, Nunes snapped, “We want water, not welfare.”
Indeed, with enough water, there’d be no need for welfare, because there’d be plenty of jobs. What’s needed, as Breitbart News’ Joel B. Pollak observes, is a better strategy:
A better use for the $1 billion that President Barack Obama pledged today to a “climate resilience fund” would be to invest in a desalination plant that could help alleviate some of California’s periodic water shortages. An Israeli company is building one right now near San Diego that just happens to cost about $1 billion and will provide 50 million gallons of potable water when completed. That would certainly be of more direct use to California farmers than promises of relief for the projected results of “climate change.”
Nunes and Pollak are right, of course. California needs a big, ambitious water program, be it from the mountains or from the oceans. And once upon a time, the Party of Lincoln–which is to say, the Hamiltonian-influenced Party of Lincoln–was all in favor of these sorts of industry-building and infrastructure-building efforts, from the Erie Canal to the Transcontinental Railroad to the Interstate Highways. The great nation we built is the testament to that vision of build, baby, build.
Yet curiously, the Republican Party these days seems little interested in any sort of activist on-the-ground solutions. It’s almost as if there’s a tacit alliance between the greens on the left and the libertarians on the right: They both agree, for different reasons, to do nothing. And that’s why the drought in California is having such a calamitous effect, because there’s no national plan to provide more water. Yes, Obama’s plan is Jimmy Carter-esque in its tolerance for decline, but at least Obama has a plan. The GOP as a whole has no plan at all.
And so as a result, despite the best efforts of Doc Hastings and a few lonely Latino Republicans such as Nunes, the people of the Central Valley, most of them Hispanic, are suffering. The folks out there want water, so that they can farm and prosper, and it’s fine with them if it’s the government that makes it happen. Indeed, in their reckoning, that’s the sort of pro-farming, pro-growth policy that the government should be focusing on.
They might never have heard of me, Alexander Hamilton–beyond maybe glancing down to see my name on a $10 bill–but they are instinctive Hamiltonians. Come to think of it, the bulk of the country is instinctively Hamiltonian, even if the elites in both parties have chosen to ignore my legacy.
Hamiltonians built this country, they defended this country, they expanded business, markets and prosperity. And oh yes, they won lots of elections. I think there could be some lessons in that for the struggling politicians–and the struggling country–of today.