Want Stupidity? Listen to candidates discussing banking.

Gingrich, Gingrich, Gingrich,  to think I once loved you.  I thought you were so smart laying out a path for resolving illegal immigration, or when you spoke about the middle east.  But, why so obtuse about banking.

I heard Newt tell how he was a historian and that he could vouch for the fact that our forefathers didn't want to have a national bank.  Well that's true to a point; but wait, wasn't Hamilton a forefather?  And, didn't he want a national bank?

Let's review a few points if we're going to go down the history path:  At the founding of this nation, America was roughly 80% agricultural.  Farmers didn't like hard currency.  They preferred a bit of inflation.  Why?  Because they had to buy seed in the spring.  Then too they had to feed the mule for several months if the animal was to pull a plow.  Oh, and we mustn't forget the farmer and his family who had to eat during the planting and growing season.  It wasn't uncommon for him to go to the bank to borrow some money.

Okay, now the crops are harvested and he sells his output.  Time to repay the bank.  It's no problem for him if the money is a bit weaker.  If during the planting and growing there's been 5% inflation and he was charged by the bank 5% interest, he's then gotten his money at essentially no interest.  Good for the farmer; bad for the bank.  And, in a nutshell, that's why most American's didn't want hard currency.  It's why they didn't want gold based currency.  It's why the planter, Thomas Jefferson, didn't want a national bank.

But, Hamilton had a commercial background.  He had been born in a British territory in the Caribbean.  He understood the importance of a national bank.  He understood how it had made the UK one of the strongest nations of its day.  Through his efforts, America established a national bank. 

Then along comes Andrew Jackson, a man of the people.  There's much good that can be said of him, but a financial genius he wasn't.  He put an end to America's national bank.  That led to a number of booms and busts and the joys of wildcat banking.  In time, the wisdom of having a national bank became apparent.  But, of course, we couldn't call it a national bank, so we called it the Federal Reserve.  But make no mistake.  It's our national bank.

Okay, so what's so wrong with a gold standard?  It's inadequate for an industrial nation.  If there's a lot of economic activity, if we're doing a lot of building, we need a money supply that can be expanded more than is possible with an item as inflexible in its supply as gold.  Can a system without gold be abused?  Of course.  That's why we try to remove it from the political sphere.

A national bank can't do everything.  It can manage monetary matters, but has little or no control over fiscal matters.  Fiscal matters are in the domain of the Congress, and we see how well that's gone.

Don't they teach this stuff in high school?