Peter Feinman: Saratoga and the Eurozone Crisis


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Everyone has heard of the ongoing troubles in Greece and the Eurozone but nobody has realized the importance of Saratoga to understanding this crisis until now.

Let me explain. It seems that Greece lied in its application to join the Eurozone. Then as might be expected it failed to perform adequately and was only able to cover up its shortcomings as a third world country trying to pass as a first world country for so long. After the Greek elections when a new government took office, the truth was revealed and all hell broke loose.

Suppose a college student lied on the admissions application and then failed to maintain a passing grade, what would happen when the truth was known? The student would be promptly expelled unless course the student was an athlete or child of a donor. That is not what happened in Europe. When the truth became known, the powers-that-be, far from expelling Greece, have consistently and a great expense sought to maintain Greece’s membership in the group despite Greece’s dishonesty and inability to meet the standards. It never deserved to be a member in the first place and perpetuating that lie can only work for so long.

How did the Eurozone get to this point? One reason is simply because it is designed to work only in good times. As long as everything is fine with the economies of the members and countries are able to get away with their dishonesty, everything is OK. But what happens when the bubble bursts and the little kid cries out that the emperor is naked? First the kid will be stomped to death by an enraged mob that doesn’t want to know the truth and second, every effort possible will be made to maintain the lie with whatever scotch-tape, glue, and masking tape is available. These stop-gap efforts were required because the Eurozone never established mechanisms controls to deal with the situation when economies go bad. Now that it needs these centralized controls, how will it be able to create them?

Welcome to Alexander Hamilton. Now days, one of the comments frequently made is that the Eurozone has arrived at its Alexander Hamilton moment. Just as Hamilton arose in a moment of economic crisis for the United States, so the Eurozone now needs its own Hamilton to organize the centralized system that will resolve the problem due to the debt of the individual members, here countries and not states, and everything eventually will be alright because the Eurozone in the 21st century like the United States in the 1790s will get it economic act together. The Eurozone then will move from its Articles of Confederation phase to its Constitutional phase with a continental FDIC and FRB.

Here we may observe why economists are not good historians. It isn’t as if Hamilton was sitting at his terminal, typing out his plan, posting it to his blog, or putting it on his Facebook page where once again social media came to the rescue. Hamilton at his desk may have composed his economic plans by himself, but there is the second part to the process that is being overlooked. Just because you may have the solution to a problem doesn’t mean it will be implemented. Hamilton like many economists analyzing the current situation may be spot on over what needs to be done economically, but that is not enough. What happens if you economically right but politically impotent?

Hamilton wasn’t only right economically, he had the chops to get the job done. He had the chops to get the job done because of someone else who wasn’t an economic wunderkind but happen to be incredibly politically potent. His name, of course, was George Washington. Without George Washington, the indispensable person of the American Revolution, Hamilton would have had no one to turn to for his plan. He would have been left to the mercy of the squabbling and weak states. Without Washington’s imprimatur, Hamilton would have the same clout as the economists you see on the cable-TV talk shows. With Washington’s support, he was able to be the hero.

The Eurozone has no George Washington. The Eurozone has no one even remotely capable of being its George Washington. Furthermore the Eurozone has had no American Revolution. Without the success of winning the war we just celebrated yesterday, Washington wouldn’t have had the standing as president of the new country that failed under the Articles of Confederation and had to reboot itself as a constitutional country. Only then did he possess the political authority to vouchsafe the plans proposed by Hamilton. And what was the turning point in the War for Independence that led to American victory, the presidency of Washington, and the economic plans of Hamilton? The Battle of Saratoga with what’s his name who is not on the victory monument in located nearby. And that my fellow New Yorkers, Americans, and Eurozonites, is why America got its act together and the Eurozone can’t now. We had the battle of Saratoga and you had Waterloo!

PS: Consider these differences between the United States and the Eurozone. Are the nations of the Eurozone willing to have one Olympic team to represent them? Are the nations of the Eurozone willing to have one World Cup team to represent them? Are the nations of the Eurozone willing to have one Davis Cup team represent them? Even during the American Revolution, the 13 colonies didn’t have separate ambassadors to England, France, Spain, and the Netherlands. Is the Eurozone ready to have one ambassador on behalf of all its countries? Back then, pretty much everyone in the colonies spoke English; the only language the Eurozone has in common is English as a second-language. So when we celebrate July 4th and think about what it means, let’s be aware of how many countries today aren’t united states within their own boundaries, let’s be aware as people from all over the world take the oath of citizenship on the birthday of their new country, how difficult it is for people of different ethnicities and races to be part of We the People in a single country. Happy July 4th.

Peter Feinman founder and president of the Institute of History, Archaeology, and Education, a non-profit organization which provides enrichment programs for schools, professional development program for teachers, public programs including leading Historyhostels and Teacherhostels to the historic sites in the state, promotes county history conferences and the more effective use of New York State Heritage Weekend and the Ramble.

2 thoughts on “Peter Feinman: Saratoga and the Eurozone Crisis

  1. Diggitt

    New York State did not have western farmers to the extent that Pennsylvania and Virginia did, or you might not be singing Hamilton’s praises quite so loudly. Like many quote-unquote economic masterminds today, Hamilton was just fine with big ideas as long as he had people of small economic importance to squash beneath his vision.

    Hamilton’s big vision (and the wallets of his banker pals) expanded because of the high tariffs he was able to levy on the products of western farmers. His behavior was the direct cause of the first federal crisis of Washington’s presidency, the Whisky Rebellion.

    Farmers in or beyond the mountains had no way to get their grain products to markets in the east, unless they made whisky out of them. But if they did, large tariffs were levied on the whisky. Hamilton and his eastern moneymen cronies wanted to keep westerners from having access to Mississippi Valley markets and force them to ship their products only eastward, despite the fact that it might force them out of business completely. Driving other people into bankruptcy was not a sign to Hamiltonians of the failure of their policies. Where have we heard that before?

    So the western farmers spoke of secession in 1792. Six counties in western Pennsylvania and Virginia actually tried–embarrassing Washington’s government fiercely. Federal troops were sent against settlers who had not so long ago been in the American armies themselves–that was how Washington paid back men and families who had adored him. A stream of these grieving families left the country, moving west.

    Hamiltonians have always meddled with the history books to make him seem like a lost hero. When you learn about his fatal duel, you rarely also hear that even though dueling was illegal, Hamilton and his son insisted on declaring for them, and his son was actually killed in a duel not long before he was. If you pay attention to how Hamilton actually lived his life–embarrassing his patron and dying by his own stupidity–he doesn’t look like such a great leader.

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