Martin Van Buren by Ted Widmer

• "When he was elected in 1836, Van Buren became the first chief executive from New York, and the first ethnic president," being a native Dutch-speaker - 6
• "One of his most courageous decisions was his refusal to join the stampede for admitting Texas, with all of its slave territory, into the union. It cost him the presidency and he knew it, but he stuck to his guns." - 12
• "Between 1837 and 1841, Americans encountered three important reality checks that suddenly made the future less appetizing. The Panic of 1837 taught that capitalism was fallible. The Log Cabin campaign of 1840, with it false promises and hard cider entreaties, taught that democracy was fallible. And rising rage over slavery taught that the Union itself was fallible." - 16
• "At twenty-nine, he was the second youngest [state] senator ever elected in New York. From then until the end of his presidency, he would serve almost continuously in government service." - 37
• "From the moment he started his career, he was he friend of the small farmer. As Franklin Roosevelt would do a century later, he tried to ease the credit burden on rural producers who were cash poor. In particular, he lashed out at the common practice of imprisonment for debt, which in his opinion was the same thing as a jail sentence 'for the misfortune of being poor, of being unable to satisfy the all-digesting stomach of some ravenous creditor.'" - 42
• "Back in 1813, in his first year as a state senator, Van Buren helped to found a newspaper, the Albany Argus" - 47
• 1821: "Van Buren ran for the U.S. Senate and won a difficult victory." - 49
• "Van Buren had laid the foundation for what would become Jacksonian Democracy in only a few short years. With his ideas about party discipline, communications, and enlarged suffrage, he had shown other like-minded individuals how to take democracy beyond the periwigs of the eighteenth century." - 51
• "Far beyond anything that had existed before, Van Buren envisioned a national structure, tethered together by speedy communications and tight message control" - 56
• "Those who have wrought great changes in the world never succeeded by gaining over chiefs; but always by exciting the multitude. The first is the resource of intrigue and produces only secondary results, the second is the resort of genius and transforms the universe." - Van Buren, 72
• "The Democratic Party, still in its infancy, was a stool with three legs. There were Westerners that Jackson had brought in, Southerners under the sway of Calhoun, and Old School Jeffersonians around Van Buren" - 75
• As Jackson's Secretary of State, "this flattering smooth-talker was good at diplomacy, and before long he had resolved two major problems favorably, winning reciprocal trade benefits from the United Kingdom in the West Indies and securing a large payment of 25 million francs from France for indemnities dating back to Napoleon." - 80
• August 16, 1831: "Van Buren sailed for England [as the newly appointed, and soon rejected by the Senate, minister]...happy to enjoy 'the quietude of a midsummer Ocean' after twenty years of unceasing political infighting." - 83
• "Van Buren's idea of a two-party system received support from an unlikely source -- a new party that sprang into existence for the express purpose of defeating Jackson and Van Buren. The Whigs, as they were ultimately known (for opposing Jackson as the revolutionary Whigs had opposed George III), were an unlikely batch of Northern quasi-Federalists and Southern states' rightists, allied more through alienation than shared principles." - 87
• "At the age of fifty-three, Martin Van Buren was in the ascendant. He was the youngest president elected to date." - 90
• "He aimed for stability, keeping many of Jackson's appointees and leaning South with new choices. Balance always." - 93
• March 17, 1837: New York merchant Philip "Hone wrote, 'The great crisis is near at hand, if it has not already arrived.' Over the next month, prices rose and financial houses fell like stacks of cards." - 96
• "Van Buren inherited a superheated economy that was completely unregulated in some ways and draconically controlled in others [cf. Specie Circular]" - 101
• "he called for Congress to meet in September to take special measures to alleviate the crisis. It was the first special session ever called that did not address a military crisis." - 102
• "Van Buren issued an executive order demanding that the slaves [from the Amistad] be taken to a naval vessel, to hasten their return to their Spanish owners" - 121
• March 31, 1840: "Van Buren issued an executive order creating a ten-hour day for federal workers, a dramatic step forward when many employees worked from sunrise to sunset." - 131
• "In the spring of 1839, the phrase 'OK' began to circulate in Boston as shorthand for 'oll korrect,' a slangy way of saying 'all right.' Early in 1840, Van Buren's supporters began to use the trendy expression to identify their candidate, whom they labored to present as 'Old Kinderhook,' perhaps in imitation of Jackson's Old Hickory." - 140
• "The Free Soil campaign was America's first great third party effort." - 155
• "He lingered into the [Civil] war's second year, and then expired at 2 a.m. on July 24, 1862, a day and a half after Lincoln read the first draft of his Emancipation Proclamation to a startled cabinet." - 164

The Road to Serfdom by F.A. Hayek

• "Whatever merits this book possesses consist not in the reiteration of this thesis but in the patient and detailed examination of the reasons why economic planning will produce such unlooked-for results and of the process by which they come about." - 43-4, 1956 Forward
• "The essence of the liberal position, however, is the denial of all privilege, if privilege is understood in its proper and original meaning of the state granting and protecting rights to some which are not available on equal terms to others." - 46, 1956 Forward
• "Few are ready to recognize that the rise of fascism and naziism was not a reaction against the socialist trends of the preceding period but a necessary outcome of those tendencies." - 59
• "'Freedom' and 'liberty' are now words so worn with use and abuse that one must hesitate to employ them to express the ideals for which they stood....'Tolerance' is, perhaps, the only word which still preserves the full meaning of the principle" - 68
• "Probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rough rules of the thumb, above all the principle of laissez faire." - 71
• "We have in effect undertaken to dispense with the forces which produced unforeseen results and to replace the impersonal and anonymous mechanism of the market by collection and 'conscious' direction of all social forces to deliberately chosen goals." - 73
• "Nobody saw more clearly than Tocqueville that democracy as an essentially individualist institution stood in an irreconcilable conflict with socialism: 'Democracy extends the sphere of individual freedom,' he said in 1848, "socialism restricts it. Democracy attaches all possible value to each man; socialism makes each man a mere agent, a mere number. Democracy and socialism have nothing in common but one word: equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.'" - 77
• "socialism means the abolition of private enterprise, of private ownership of the means of production, and the creation of a system of 'planned economy' in which the entrepreneur working for profit is replaced by a central planning body." - 83
• "The liberal argument is in favor of making the best possible use of the forces of competition as a means of coordinating human efforts, not an argument for leaving things just as they are." - 85
• "What in effect unites the socialists of the Left and the Right is this common hostility to competition and their common desire to replace it by a directed economy." - 88-9
• "planning and competition can be combined only by planning for competition but not by planning against competition." - 90
• "To direct all our activities according to a single plan presupposes that every one of our needs is given its rank in an order of values which much be complete enough to make it possible to decide among all the different courses which the planner has to choose. It presupposes, in short, the existence of a complete ethical code in which all the different human values are allotted their due place." - 101
• "The point which is so important is the basic fact that it is impossible for any man to survey more than a limited field, to be aware of the urgency of more than a limited number of needs. Whether his interests center round his own physical needs, or whether he takes a warm interest in the welfare of every human being he knows, the ends about which he can be concerned will always be only an infinitesimal fraction of the needs of all men. This is the fundamental fact on which the whole philosophy of individualism is based." - 102
• "Even if...a democracy should succeed in planning every sector of economic activity, it would still have to face the problem of integrating those separate plans into a unitary whole. Many separate plans do not make a planned whole -- in fact, as the planners ought to be the first to admit, they may be worse than no plan." - 107
• "It is the price of democracy that the possibilities of conscious control are restricted to the fields where true agreement exists and that in some fields things must be left to chance." - 109
• "It may well be true that our generation talks and thinks too much of democracy and too little of the values which it serves....Democracy is essentially a means, a utilitarian device for safeguarding internal peace and individual freedom. As such it is by no means infallible or certain." - 110
• "It cannot be denied that the Rule of Law produces economic inequality -- all that can be claimed for it is that this inequality is not designed to affect particular people in a particular way." - 117
• "Central planning means that the economic problem is to be solved by the community instead of the individual; but this involves that it must also be the community, or rather its representatives, who must decide the relative importance of the different needs." - 127
• "in competition chance and good luck are often as important as skill and foresight in determining the fate of different people." - 134
• "all government affects the relative position of different people and that there is under any system scarcely an aspect of our lives which may not be affected by government action is certainly true." - 139
• "there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody." - 148
• "It seems to be almost the law of human nature that it is easier for people to agree on a negative program -- on the hatred of an enemy, on the envy of those better off -- than on any positive task. The contrast between the 'we' and the 'they,' the common fight against those outside the group, seems to be an essential ingredient in any creed which will solidly knit together a group for common action." - 161

The General Theory of Employment, Interest, and Money by J.M. Keynes

Introduction - Chapter 1

• The general theory: "I shall argue that the postulates of the classical theory are applicable to a special case only and not to the general case, the situation which it assumes being a limiting point of the possible positions of equilibrium." - 3

The Postulates of the Classical Economics - Chapter 2

• Fundamental postulates of the classical theory of employment
• "The wage is equal to the marginal product of labour" - 5
• "The utility of the wage when a given volume of labour is employed is equal to the marginal disutility of that amount of employment." - 5
• "possible means of increasing employment" - 7
• "An improvement in organization or in foresight which diminishes 'frictional' unemployment"
• "decrease in the marginal disutility of labour, as expressed by the real wage for which additional labour is available, so as to diminish 'voluntary' unemployment"
• "increase in the marginal physical productivity of labour in the wage-goods industries"
• "increase in the price of non-wage goods compared with the price of wage goods, associated with a shift in the expenditure of non-wage earners from wage-goods to non-wage goods"
• "When money-wages are rising...it will be found that real wages are falling; and when money-wages are falling, real wages are rising." - 10
• "the struggle about money-wages primarily affects the distribution of the aggregate real wage between different labour-groups, and not its average amount per unit of employment" - 14
• "In a given state of organisation, equipment and technique, the real wage earned by a unit of labour has a unique (inverse) correlation with the volume of employment." - 17
• "Contemporary thought is still deeply steeped in the notion that if people do not spend their money in one way they will spend it in another." - 20

The Principle of Effective Demand - Chapter 3

• Two kinds of entrepreneurial expense
• factor cost: "the amounts which he pays out to the factors of productions for their current services" - 23
• user cost: "the amounts which he pays out to other entrepreneurs for what he has to purchase from them together with the sacrifice which he incurs by employing the equipment instead of leaving it idle" - 23
• income (of entrepreneur) = value of output - (factor cost + user cost)
• total income = income + factor cost
• effective demand: "point of the aggregate demand function [D], where it is intersected by the aggregate supply function" - 25
• Propositions summarizing the General Theory
• "income (both money-income and real income) depends on the volume of employment N." - 28
• propensity to consume (D1): "the relationship between the community's income and what it can be expected to spend on consumption" - 28
• D = D1 + D2; D2 = new investment - 29
• "the volume of employment in equilibrium depends on (i) the aggregate supply function...(ii) the propensity to consume...and (iii) the volume of investment" - 29
• "N cannot exceed the value which reduces the real wage to equality with the marginal disutility of labour" - 29
• "When employment increases, D1 will increase, but not by so much as D" - 29
• "It may well be that the classical theory represents the way in which we should like our Economy to behave. But to assume that it actually does so is to assume our difficulties away." - 34

The Choice of Units - Chapter 4

• "In dealing with the theory of employment I propose, therefore, to make use of only two fundamental units of quantity, namely, quantities of money-value and quantities of employment." - 40

Expectation as Determining Output and Employment - Chapter 5

• short-term expectation: "the price which a manufacturer can expect to get for his 'finished' output" - 46
• long-term expectation: "what the entrepreneur can hope to earn in the shape of future returns if he purchases (or, perhaps, manufactures) 'finished' output as an addition to his capital equipment." - 47
• long-period employment: "the steady level of employment...corresponding to that state of expectation." - 48
• "the economic machine is occupied at any given time with a number of overlapping activities, the existence of which is due to various states of expectation." - 50

The Propensity to Consume, The Objective Factors - Chapter 8

• "The ultimate object of our analysis is to discover what determines the volume of employment." - 90
• "in general, we shall in what follows take the subjective as given; and we shall assume that the propensity to consume depends only on changes in the objective factors" - 91
• "Account has also to be taken of all kinds of risks, such as the prospect of not living to enjoy the future goods or of confiscatory taxation. As an approximation...we can identify this with the rate of interest." - 93
• "If fiscal policy is used as a deliberate instrument for the more equal distribution of incomes, its effect in increasing the propensity to consume is, of course, all the greater." - 95
• "the propensity to consume may be considered a fairly stable function, provided that we have eliminated changes in the wage-unit in terms of money." - 95
• "apart from short period changes in the level of income, it is also obvious that a higher absolute level of income will tend, as a rule to widen the gap between income and consumption." - 97
• "employment can only increase pari passu with an increase in investment....For since consumers will spend less than the increase in aggregate supply price when employment is increased, the increased employment will prove unprofitable unless there is increase in investment to fill the gap." - 98
• "We cannot, as a community, provide for future consumption by financial expedients but only by current physical output." - 104
• "Consumption is satisfied partly by objects produced currently and partly by objects produced previously, i.e. by disinvestment." - 105
• "The obstacle to a clear understanding is...much the same as in many academic discussions of capital, namely, an inadequate appreciation of the fact that capital is not a self-sufficient entity existing apart from consumption." - 106

The Propensity to Consume, The Subjective Factors - Chapter 9

• "Apart from the savings accumulated by individuals, there is also the large amount of income, varying perhaps from one-third to two-thirds of the total accumulation in a modern industrial community such as Great Britain or the United States, which is withheld by Central and Local Governments, by Institutions and by Business Corporations" - 108
• "The rise in the rate of interest might induce use to save more, if our incomes were unchanged. But if the higher rate of interest retards investment, our incomes will not, and cannot, be unchanged." - 111

The Marginal Propensity to Consume and the Multiplier - Chapter 10

• "The marginal propensity to consume is not constant for all levels of employment, and it is probable that there will be, as a rule, a tendency for it to diminish as employment increases" - 120
• "It is curious how common sense, wriggling for an escape from absurd conclusions, has been apt to reach a preference for wholly 'wasteful' forms of loan expenditure rather than for partly wasteful forms, which, because they are not wholly wasteful, tend to be judged on strict 'business' principles. For example, unemployment relief financed by loans is more readily accepted than the financing of improvements at a charge below he current rate of interest; whilst the form of digging holes in the ground known as gold-mining, which not only adds nothing whatever to the real wealth of the world but involves the disutility of labour, is the most acceptable of all solutions." - 129

The Marginal Efficiency of Capital - Chapter 11

• supply price: "the price which would just induce a manufacturer newly to produce an additional unit of such [capital-]assets, i.e. what is sometimes called its replacement cost." - 135
• marginal efficiency of capital: " the relation between the prospective yield of one more unit of that type of capital and the cost of producing that unit" - 135
• "The expectation of a fall in the value of money stimulates investment, and hence employment generally, because it raises the schedule of the marginal efficiency of capital, i.e. the investment demand-schedule" - 141-2
• "The fact that the assumption of the static state often underlie present-day economic theory, imports into it a large element of unreality." - 146

The State of Long-Term Expectation - Chapter 12

• "In practice we have tacitly agreed, as a rule, to fall back on what is, in truth, a convention. The essence of this convention...lies in assuming that the existing state of affairs will continue indefinitely, except in so far as we have specific reasons to expect a change." - 152
• "Of the maxims of orthodox finance none, surely, is more anti-social than the fetish of liquidity, the doctrine that it is a positive virtue on the part of investment institutions to concentrate their resources upon the holding of 'liquid' securities. It forgets that there is no such thing as a liquidity of investment for the community as a whole." - 155
• "We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees." - 156

The General Theory of the Rate of Interest - Chapter 13

• "the quantity of money is the other factor, which, in conjunction with liquidity-preference, determines the actual rate of interest in given circumstances." - 168
• "The market price will be fixed at the point at which the sales of the 'bears' and the purchases of the 'bulls' are balanced." - 170
• "The concept of Hoarding may be regarded as a first approximation to the concept of Liquidity-preference." - 174

The Classical Theory of the Rate of Interest - Chapter 14

• "Unlike the neo-classical school, who believe that save and investment can be actually unequal, the classical school proper has accepted the view that they are equal." - 177
• "The mistake originates from regarding interest as the reward for waiting as such, instead of as the reward for not-hoarding" - 182

The Psychological and Business Incentives to Liquidity - Chapter 15

• "the income-velocity of money merely measures what proportion of their incomes the public chooses to hold in cash, so that an increased income-velocity of money may be a symptom of a decreased liquidity-preference." - 194
• income motive: "One reason for holding cash is to bridge the interval between the receipt of income and its disbursement." - 195
• business motive: "Similarly, cash is held to bridge the interval between the time of incurring business costs and that of the receipt of the sale-proceeds" - 195
• precautionary motive: "To provide for contingencies requiring sudden expenditure and for unforeseen opportunities of advantageous purchases" - 196
• "the banking system and the monetary authority are dealers in money and debts and not in assets or consumables." - 205

Sundry Observations on the Nature of Capital - Chapter 16

• "since the expectation of consumption is the only raison d'etre of employment, there should be nothing paradoxical in the conclusion that a diminished propensity to consume has cet. par. a depressing effect on employment." - 211
• "Every act of saving involves a 'forced' inevitable transfer of wealth to him who saves, though he in his turn may suffer from the savings of others." - 212
• "It is much preferable to speak of capital as having a yield over the course of its life in excess of its original cost, than as being productive." - 213

The Essential Properties of Interest and Money - Chapter 17

• "Unemployment develops, that is to say, because people want the moon; -- men cannot be employed when the object of desire (i.e. money) is something which cannot be produced and the demand for which cannot readily be choked off. There is no remedy but to persuade the public that green cheese is practically the same thing and to have a green cheese factory (i.e. a central bank) under public control." - 235
• "The neutral rate of interest can be more strictly defined as the rate of interest which prevails in equilibrium when output and employment are such that the elasticity of employment as a whole is zero." - 245

The General Theory of Employment Re-Stated - Chapter 18

• "changes in the rate of consumption are, in general, in the same direction (though smaller in amount) as changes in the rate of income." - 248
• "the evidence indicates that full, or even approximately full, employment is of rare and short-lived occurrence....an intermediate situation which is neither desperate nor satisfactory is our normal lot." - 249-50

Changes in Money-Wages - Chapter 19

• "whilst no one would wish to deny the proposition that a reduction in money-wages accompanied by the same aggregate effective demand as before will be associated with an increase in employment, the precise question at issue is whether the reduction in money-wages will or will not be accompanied by the same aggregate effective demand as before." - 259
• "a movement by employers to revise money-wage bargains downward will be much more strongly resisted than a gradual and automatic lowering of real wages as a result of rising prices." - 264

The Employment Function - Chapter 20

• "the inevitable price-instability due to change cannot affect the actions of entrepreneurs, but merely directs a de facto windfall of wealth into the laps of the lucky ones" - 288

The Theory of Prices - Chapter 21

• "So long as there is unemployment, employment will change in the same proportion as the quantity of money; and when there is full employment, prices will change in the same proportion as the quantity of money" - 296
• "Too large a proportion of recent 'mathematical' economics are mere concoctions, as imprecise as the initial assumptions they rest on,which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols." - 298
• "When a further increase in the quantity of effective demand produces no further increase in output and entirely spends itself on an increase in the cost-unit fully proportionate to the increase in effective demand, we have reached a condition which might be appropriately designated as one of true inflation." - 303

Notes on the Trade Cycle - Chapter 22

• "The right remedy for the trade cycle is not to be found in abolishing booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi-boom." - 322

Notes on Mercantilism, The Usury Laws, Stamped Money and Theories of Under-Consumption - Chapter 23

• "The fact that the advantage which our own country gains from a favorable balance is liable to involve an equal disadvantage to some other country (a point to which the mercantilists were fully alive) means not only that great moderation is necessary, so that a country secures for itself no larger a share of the stock of the precious metals than is fair and reasonable, but also that an immoderate policy may lead to a senseless international competition for a favorable balance which injures all alike." - 338-9

Lords of Finance: The Bankers Who Broke The World by Liaquat Ahamed

• "Each in his own way illuminates the national psyche of his time. Montagu Norman, with his quixotic reliance on his fault intuition, embodied a Britain stuck in the past and not yet reconciled to its newly diminished standing in the world. Emile Moreau, in his insularity and rancor, reflected all too accurately a France that had turned inward to lick the terrible wounds of war. Benjamin Strong, the man of action, represented a new generation in America, actively engaged in bringing its financial muscle to bear in world affairs. Only Hjalmar Schacht, in his angry arrogance seemed out of tune with the weak and defeated Germany for which he spoke, although perhaps he was simply expressing a hidden truth about the nation's deeper mood." - 8
• "Boiled down to its essentials, a central bank is a bank that has been granted a monopoly over the issuance of currency." - 11
• 1914: 59 countries "had bound their currencies to gold" - 13
• "Shaken by the crisis [of 1907], the U.S. Congress decided to act. In 1908, it created the National Monetary Commission...to undertake a comprehensive study of the banking system...Memories of how close the system had come to imploding progressively dimmed and the momentum for reform stalled." - 54
• December 23, 1913: Woodrow Wilson signs the Federal Reserve Act; "the Glass Plan called for a number of autonomous regional institutions: Federal Reserve Banks...While these individual entities were to be controlled and run by local bankers, a capstone -- the Federal Reserve Board, a public agency whose members were to be appointed by the president -- was placed in an oversight role over the whole structure." - 56-7
• "Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency." - 99, J.M. Keynes
• "Only on reparations did Germany seem able to fight back. It discovered what every large debtor at some point discovers: that when one owes a large amount of money, threatening to default can give one the upper hand." - 109
• "Germany experienced the single greatest destruction of monetary value in human history. By August 1923, a dollar was worth 620,000 marks and by early November 1923, 630 billion." - 121
• "the really pernicious effect of war debts was that they made it hard, if not impossible, for Britain to forgo collecting its own debts from France and Germany, made France all the more obstinate in its efforts to collect reparations from Germany, and led Europe into a self-defeating vicious cycle of financial claims and counterclaims." - 144
• "Whether to deflate or devalue became the central economic decision for every country after the [First World] war. The burden of deflation fell on workers, businesses, and borrowers, that of devaluation on savers...The United States and Britain took the route of deflation, Germany and France that of devaluation." - 157
• "The bigger concern among bankers after the war was not so much that the world was short of gold, but that too much of the gold was concentrated in the United States." - 163
• "The world of the international gold standard had become like a poker table at which one player has accumulated all the chips, and the game simply cannot get back into play." - 164, emphasis mine
• "the Federal Reserve was so flush with gold that it had gone from being the central bank of the United States to being the central bank of the entire industrial world." - 172
• "the new German prosperity depended on what Keynes described as 'a great circular flow of paper' across the Atlantic: 'The United States lends money to Germany, Germany transfers its equivalents to the Allies, the Allies pay it back to the United States government. Nothing real passes -- no one is a penny the worse. The engravers' dies, the printers' forms are busier. But no one eats less, no one works more.'" - 215-6
• "During [Montagu] Norman's visit to New York in January 1925, [Benjamin] Strong had warned him, 'In a new country such as ours with an enthusiastic, energetic and optimistic population,...there would be times when speculative tendencies would make it necessary for the Federal Reserve Banks to exercise restraint by increased discount rates, and possibly higher money rates in the market. Should such times arise, domestic considerations would likely outweigh foreign sympathies.'" - 240
• "In the fall of 1925, Hoover, not shy about interfering in his cabinet colleagues' business -- Parker Gilbert called him the 'Secretary of Commerce and the Under-Secretary of all other departments' -- decided to launch a campaign against the pervasive atmosphere of speculation that he claimed was infecting the country, from Florida real estate to the stock market." - 275
• "In Strong's view, something about the American character -- the exuberance, the driving optimism, the naive embrace of fads -- lent itself to periods of speculative excess." - 277
• "At particular times a great deal of stupid people have a great deal of stupid money....At intervals....the money of these people -- the blind capital, as we call it, of the country -- is particularly large and craving; it seeks for someone to devour it, and there is a 'plethora'; it finds someone, and there is 'speculation'; it is devoured, and there is 'panic.'" - 307, Walter Bagehot
• in early 1929 "The Fed was now paralyzed by this standoff between its two principal arms. The Board kept insisting that the right way to deflate the bubble was through 'direct action': credit controls, particularly of brokers' loans. New York was equally insistent that such a policy could not work, that it was impossible to control the application of credit once it lefts the doors of the Federal Reserve." - 322-3
• "To jump-start the economy, a central bank had to have enough gold, the underlying raw material for credit creation under the gold standard. The international monetary system was now operating, however, in a very perverse way. Because of investor fear, capital in search of security was flowing into those countries with already large gold reserves -- such as the United States and France -- and out of countries with only modest reserves -- such as Britain and Germany." - 375
• "'Gold is out of sight -- gone back into the soil. But when the gods are no longer seen in yellow panoply walking the earth, we begin to rationalize them; and it is not long before there is nothing left.' The bullion reserves that backed the credit systems of the world, buried as they were in underground vaults...were invisible to the public eye. They had acquired an almost metaphysical existence. Keynes thought that perhaps gold, its usefulness now outlived, might become less important. He compared the situation to the transition in government from absolute to constitutional monarchy." - 383-4
• "Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." - 393, Napoleon Bonaparte
• "As the economy lost ground, unemployment climbed, and the budget deficit widened [in Germany], [Heinrich] Bruning [, the new Chancellor,] focused on balancing the budget. Unemployment benefits were restricted; salaries of all high federal and state officials, including the president's, were slashed by 20 percent. Wages of lower-level officials were cut 6 percent; income taxes were raised, taxes on beer and tobacco increased, and new levies imposed on warehouses and mineral water. All of these measures made the Depression worse." - 400
• After resigning in 1930, Schacht "spoke about reparations, seeking to make his audience understand German bitterness over the issue: 'You must not think that if you treat people for ten years as the German people have been treated they will continue to smile....Reparations are the real cause of the world-wide economic depression.'" - 402
• "Never has the incapacity of the economic leaders of the capitalist world so glaringly demonstrated as today....A capitalism which cannot feed the workers of the world has no right to exist. The guilt of the capitalist system lies in its alliance with the violent policies of imperialism and militarism" - 417-8, Schacht, The End of Reparations
• "Britain's problem was not its budget deficit, but rather that it had clung to the role of banker to the world without any longer having the money or the resources to do so and at a time when most of the world was a damn poor risk." - 429
• Roosevelt's "simplistic view was that since the Depression had been associated with falling prices, recovery could only come about when prices began going the other way. His advisers patiently tried to explain to him that he had the causality backward....They were themselves only half right. For in an economy where everything is connected, there is often no clear distinction between cause and effect." - 459
• "In 1935, Congress passed a banking act designed to reform the Federal Reserve. Authority for all major decisions was now centralized in a restructured Board of Governors. The regional reserve banks were stripped of much of their powers and responsibility for open market operations was now vested in a new committee of twelve, comprising the seven governors and a rotating group of five regional bank heads, renamed presidents." - 475

The Protestant Ethic and the "Spirit" of Capitalism by Max Weber

The Problem

- Denomination and Social Stratification

1. "business leaders and owners of capital, as well as the skilled higher strata of the labor force, and especially the higher technical or commercially trained staff of modern enterprises tend to be predominantly Protestant." - 1
2. "But what is often forgotten is that the Reformation meant...the replacement of an extremely relaxed, practically imperceptible, and scarcely more than formal authority by an infinitely burdensome and earnest regimentation of the conduct of life" - 2
3. "The Catholic...is more calm; his acquisitive drive is lower, he places more value on a life which is as secure as possible, even if this should be on a smaller income, than on a perilous, exciting life, which could bring honors and riches. As the popular saying jokingly has it, 'either eat well or sleep soundly.' In the above case, the Protestant likes to eat well, while the Catholic wants to sleep soundly." - 5, Offenbacher

- The "Spirit" of Capitalism

1. "Kurnberger, in his book, The Man Tired of America, sums up its philosophy of life thus: ' They turn cattle into tallow, and people into money.' The essence of this 'philosophy of avarice' is the idea of the duty of the individual to work toward the increase of his wealth, which is assumed to be an end in itself." - 11
2. "the 'summum bonum' of this 'ethic' is the making of money and yet more money, coupled with a strict avoidance of all uninhibited enjoyment...it is...so much purely thought of as an end in itself that it appears as something wholly transcendent and irrational, beyond the 'happiness' or the 'benefit' of the individual." - 12
3. "Moneymaking --  provided it is done legally -- is, within the modern economic order, the result and the expression of diligence in one's calling and this diligence is...the real alpha and omega of [Benjamin] Franklin's morality" - 12-3
4. Traditionalism: "a person does not 'by nature' want to make more and more money, but simply to live -- to live in the manner in which he 'is accustomed to live, and to earn as much as is necessary for this.'" - 16
5. "We shall...provisionally use the expression 'spirit of capitalism' for that attitude which, in the pursuit of a calling strives systematically for profit for its own sake in the manner exemplified by Benjamin Franklin." - 19
6. Rationalism: "a historical concept which embraces a world of opposites...that concrete form of 'rational' thinking and living from which arose the idea of the 'calling' and that devotion to the work of the calling -- so irrational from the point of view of eudaemonistic self-interest -- which was and still is one of the most characteristic components of our capitalist culture." - 27-8

- Luther's Conception of the Calling

1. "labor in a secular calling appears as the outward expression of Christian charity. This view is based in particular on the argument that division of labor forces each individual to work for others, an extremely otherworldly argument which is almost grotesquely at variance with Adam Smith's well-known dictum." - 29
2. "If economic traditionalism was at first a result of Pauline indifference, it later came to flow from an ever-more intense belief in providence that identifies unconditional obedience to God with unconditional submission to the situation in which one has been placed." - 32

The Idea of the Calling in Ascetic Protestantism

- The Religious Foundations of Innerworldly Asceticism

1. "To assume that human merit or fault had any influence on one's fate would be to regard God's absolutely free decision which had stood for all eternity, as capable of being changed by human influence -- an impossible idea...Since his decrees were immutably fixed, those on whom he bestowed his grace could never lose it, just as those to whom he denied it could never attain it." - 73
2. "The wonderfully purposeful structuring and organization of this cosmos, which, according to the biblical revelation and equally according to natural insight, is evidently designed to be of 'use' to the human race, shows that labor in the service of this social usefulness furthers the divine glory and is willed by God." - 76
3. regarding Calvin's doctrine of predestination, "One question inevitably very soon arose for every single believer, and forced all other interests into the background: 'Am I one of the elect? And how can I be certain of my election?'" - 76
4. "tireless labor in a calling was urged as the best possible means of attaining this self-assurance" of election in the eschatology of predestination - 77-8
5. "Totally unsuited though good works are to serve as a means of attaining salvation...they are indispensable as signs of election...This means, however, the Calvinist 'creates' his salvation himself (as it is sometimes expressed) -- more correctly: creates the certainty of salvation." - 79
6. Pietism: "For our subject...merely the penetration of methodically cultivated and controlled, that is , ascetic, living into areas of non-Calvinist religious observance." - 90
7. "just as in external 'material' life, the inclination to seek enjoyment in the present conflicts with the rational structuring of the 'economy', which is, after all, based on the need to make provision for the future, so it is, in a sense, in the sphere of religious life." - 94
8. Methodism: "A combination of emotional and yet ascetic religious practice and increasing indifference or even rejection of the dogmatic foundation of Calvinist asceticism is a distinguishing mark of the Anglo-American equivalent to continental Pietism" - 95

- Asceticism and the Capitalist Spirit

American Lion: Andrew Jackson in the White House by Jon Meacham

• "In his first weeks in office, with John Eaton's help, Jackson was direct with the Indians: either submit to state law or leave. Despite treaties signed and assurances given, he did not believe the Indians had title to the land, and he would not tolerate competing sovereignties within the nation." - 91
• "The president, Jackson believed, should be an instrument of the people against the combined interests of the rich and the incumbent. 'Our system of government was by its framers deemed an experiment, and they therefore consistently provided a mode of remedying its defects.'...Amend the Constitution, Jackson said...limit the executive to a single four- or six-year term, thus checking the danger of a despot." - 120
• "Never for a moment believe that the great body of the citizens of any State or States can deliberately intend to do wrong. They may, under the influence of temporary excitement or misguided opinions, commit mistakes; they may be misled for a time by the suggestions of self-interest; but in a community so enlightened and patriotic as the people of the United States argument will soon make them sensible of their errors, and when convinced they will be ready to repair them." - Andrew Jackson, 134
• "Jackson's vision of himself as the embodiment of the people standing against entrenched interests, combined with his appetite for control and for power, led him to see the veto as more than an occasional tool. Congress should consult with the president in advance of sending legislation down Pennsylvania Avenue, Jackson said -- a novel notion in 1830." - 141
• "If a mass representative democracy were to work well, a leader's troops could not be -- to borrow a phrase from the Revolutionary War ethos so important to Jackson -- sunshine patriots...A willingness to wage constant partisan combat, no matter what the issue, was an emerging requirement in the politics coming into being in the 1830s." - 188
• "Without union our independence and liberty would never have been achieved; without union they can never be maintained. Divided into twenty-four, or even a smaller number, of separate communities, we shall see our internal trade burdened with numberless restraints and exactions; communications between distant points and sections obstructed or cut off; our sons made soldiers to deluge with blood the fields they now till in peace...The loss of liberty, of all good government, of peace, plenty, and happiness, must inevitably follow a dissolution of the Union." - Andrew Jackson, 249
• "On Monday, February 22, 1836, in a message to Congress, Jackson quoted George Washington: 'There is a rank due to the United States among nations which will be withheld, if not absolutely lost, by the reputation of weakness. If we desire to avoid insult, we must be able to repel it. If we desire to secure peace, one of the most powerful instruments of our rising prosperity, it must be known that we are at all times, ready for war.'" - 297
• "The motion to expunge carried, and, after what Isaac Bassett called 'a storm of hisses and groans' from the left wing of the Circular Gallery (the sergeant at arms rounded up the 'disturbers'), the record of Jackson's censure for abuse of power [by unilaterally removing government deposits from the Second Bank of the United States] was marked out of the journal by the secretary of the Senate." - 337
• "For Lincoln as for Jackson, a majority was neither always right nor always wrong. The right would depend on the circumstances. But the president's duty was constant: to preserve the Union, for without the Union no progress was possible." - 356

John Quincy Adams: A Public Life, A Private Life by Paul C. Nagel

• "In the United States, 'Publicola' [one of Adams' literary pseudonyms] hastened the opening of party warfare. Factions called Federalists and Republicans began dividing over the issues raised by Thomas Paines and John Quincy Adams" - 74
• "His diary abounded with shamefaced admissions of wasting time or of reading to no purpose. What he needed, Adams now declared, was the diligence imposed by a regular schedule, such as one that would come with a seat in the legislature." - 134
• "As he scornfully asserted, ordinary lawmakers, state and national, had one guiding principle, which was to 'be satisfied to provide for the occasions of the day, and leave future times to take care of themselves.'" - 135
• "There are energies in the constitution of Man which a long protracted peace always weakens, and sometimes extinguishes altogether. Occasional war is one of the rigorous instruments in the hands of Providence to give tone to the character of nations." - JQA, 214
• "With the capable assistance of Richard Rush, who had gone to London as his successor, John oversaw the negotiations leading to the Treaty of 1818. This agreement established the northwest boundary between the United States and Canada at the 49th parallel to the Rocky Mountains, and left the region beyond open to citizens of both nations." - 249
• "His was a nature ordained to be darkened by worry, over his relatives and himself. Only a rare time of family joy, an occasional professional success, or, most often, moments of bibulousness could release him temporarily from his torment." - 256
• "Without hesitation, Adams claimed that if the world adopted the metric system, the upshot would bring 'the foretaste here of man's eternal felicity. It would help cast down the Spirit of Evil...from his dominion over men.' If a permanent, universal uniformity of weights and measures was ever achieved, Adams predicted that those who brought it about 'would be among the greatest of benefactors of the human race.'" - 265
• "His most important motive was an unalloyed desire to stand tall in history as a benefactor of the republic and of mankind in general. If the nation rejected him, Adams believed, he would be forever disgraced in history's eyes." - 285
• "All of Adams' scientific and educational proposals were defeated, as were his efforts to enlarge the road and canal systems. A design to strengthen the Bank of the United States as a centralized credit authority and a plan to refinance the public debt were lost. His campaign for a national bankruptcy act was blocked, as were efforts to increase revenue from the sale of public lands. In short, a vengeful opposition was delighted to kick around almost every legislative proposal that hinted at Adams' determination to pursue national development through federal means." - 303
• "The older he became, the more certain was JQA that his only assured way of benefiting future generations was by planting trees." - 367
• "By 108 to 80, a gratifying margin, the House had voted to approve Adams' resolution rescinding the hated gag rule. Thereafter, petitioners who urged the abolition of slavery and the slave trade would be freely heard. But it seemed an anticlimax, given the far graver challenge of Texas." - 403

The Last Founding Father: James Monroe and a Nation's Call to Greatness by Harlow Giles Unger

• "An ardent Freemason, Lafayette viewed the Revolutionary War as more than a war to liberate thirteen colonies from Britain; he believed it represented a worldwide conflict to liberate mankind from tyranny of all kinds, religious as well as political. Monroe instantly embraced the broadened concept, seeing beyond national borders for the first time and growing passionate about the rights of man." - 28
• "Monroe had, as a young man, believed that expansion of individual liberties was central to the policies of modern governments born of revolution and, indeed, that revolutions would eventually tear down national boundaries and unite mankind. Now he recognized that protection of national interests was the raison d'etre of all governments, whether born of revolution or not. Expansion of individual liberties had simply been a by-product of the American Revolution because it was essential for uniting the American people and, therefore, in the national interest." - 178
• "With the government bankrupt and no central bank from which to borrow, Monroe ignored both the law and the Constitution and seized power. Saying he was the government of the United States, he intimidated private banks and municipal corporations into lending him more than $5 million on his own signature." - 248
• "Possessing as we do all the raw materials, the fruits of our own soil and industry, we ought not to depend in the degree we have done on supplies from other countries" -  James Monroe, 263
• "Marshall's Federalist rulings gave Republican Monroe the constitutional tools he needed to expand the United States into an American empire and lead the American people into the greatest period of extended prosperity in the nation's history." - 264
• "After assuming the presidency, Monroe remained irate about the Federalist-led secessionist movement in New England during the war. Equating secessionism with treason, he excluded Federalists from the cabinet and pledged 'to prevent the reorganization and revival of the federal party.'" - 267
• Monroe "told Congress, 'the revenue arising from imposts and tonnage and from the sale of public lands will be fully adequate to the support of the civil government...without the aid of internal taxes. I consider it my duty to recommend to Congress their repeal.' And with that, Congress abolished all property taxes and other internal taxes in the United States." - 276
• "In addition to ceding the Floridas, the Adams-Onis, or Transcontinental Treaty, defined western limits of the Louisiana Territory, with the Spanish ceding all claims to the Pacific Northwest and extending nominal U.S. sovereignty to the Pacific Ocean." - 293
• "Without a political party to control individual political ambitions, the president had no mechanism to discipline his own cabinet members, let alone members of Congress...In effect, Monroe had created political anarchy and, in doing so, he not only rendered himself politically impotent, he permitted new divisions based on personal political ambitions to form between political leaders." - 310
• "As the Duke of Wellington had warned, no nation on earth was powerful enough to sustain military supply lines long enough to challenge American hegemony in the Western Hemisphere. With the Monroe Doctrine, most European leaders realized it would be far less costly to trade with the Americans than to try to subjugate them." - 317

History of the United States of America during the Administrations of James Madison by Henry Adams

• "In truth, the manufactories of New England were created by the embargo, which obliged the whole nation to consume their products or to go without." - 16
• "Macon's Bill No. 2 [April 7, 1810] marked the last stage toward the admitted failure of commercial restrictions as a substitute for war." - 137
• "'This scene on the Continent,' he continued to Jefferson, 'and the effect of English monopoly on the value of our produce are breaking the charm attached to what is called free-trade, foolishly by some and wickedly by others.' He [Madison] reverted to his life-long theory of commercial regulations." - 205
• "England and the United States, like two vultures, hovered over the expiring empire, snatching at the morsels they most coveted, while the unfortunate Spaniards, to whom the rich prey belonged, flung themselves, without leadership or resources, on the ranks of Napoleon's armies. England pursued her game over the whole of Spanish America, if not by government authority, more effectively by private intrigue; while the United States for the moment confined their activity to a single object [West Florida], not wholly without excuse." - 213
• "No acid ever worked more mechanically on a vegetable fibre than the white man acted on the Indian. As the line of American settlements approached, the nearest Indian tribes withered away." - 343
• "Men would do little but talk politics, and very few professed themselves satisfied with the condition into which their affairs had been brought. The press cried for war or for peace, according to its fancy; but although each of the old parties could readily prove the other's course to be absurd, unpatriotic, and ruinous, the war men, who were in truth a new party, powerless to restore order by legitimate methods, shut their ears to the outcry, and waited until actual war should enforce a discipline never to be imposed in peace." - 439
• "In every respect as the Federalists looked back on the past twelve years their prophecies had come true. The Republican party, they argued, had proved itself incompetent, and had admitted the failure of its principles; it had been forced to abandon them in practice, to replace the government where the Federalists had put it, and to adopt all the Federalists' methods; and even then the party failed...The government was ruined in credit and character; bankrupt, broken, and powerless, it continued to exist merely because of habit...Society held itself together merely because it knew not what else to do." - 666
• "All great nations had fought, and at one time or another every great nation in Europe had been victorious over every other; but no people, in the course of a thousand years of rivalry on the ocean, had invented or had known how to sail a Yankee schooner." - 841
• John Quincy Adams "had been allowed to seem to kindle the greatest war of modern times, and had been invited to make use of Russia against England; but the Czar's reasons for granting such favor were mysterious even to Adams, for while Napoleon occasionally avowed motives, Alexander never did. Russian diplomacy moved wholly in the dark." - 857
• "I am not anxious to accelerate the approach of the period when the great mass of American labor shall not find employment in the field; when the young men of the country shall be obliged to shut their eyes upon external Nature, ---upon the heavens and the earth, -- and immerse themselves in close and unwholesome workshops" - Daniel Webster, 879
• "With the repeal of the embargo [on April 14, 1814] ended the early period of United States history, when diplomatists played a part at Washington equal in importance to that of the Legislature or the Executive. The statecraft of Jefferson and Madison was never renewed. Thenceforward the government ceased to balance between great foreign Powers, and depended on its own resources." - 892
• "The Treasure was bankrupt. The formal stoppage of payments in interest on the debt was announced, November 9 [, 1814], by an official letter from the secretary [Dallas], notifying holders of government securities in Boston that the Treasury could not meet its obligations, and that 'the government was unable to avert or to control this course of events.' After that date the Treasury made no further pretense of solvency." - 1079
• "Of all the machinery created by the Constitution, the House alone directly reflected and represented the people; and if the people disliked it, they disliked themselves." - 1272
• "The continent lay before them, like an uncovered ore-bed. They could see, and they could even calculated with reasonable accuracy, the wealth it could be made to yield. With almost the certainty of a mathematical formula, knowing the rate of increase of population and of wealth, they could read in advance their economical history for at least a hundred years." - 1300
• "A people which had in 1787 been indifferent or hostile to roads, banks, funded debt, and nationality, had become in 1815 habituated to ideas and machinery of the sort on a great scale." - 1314
• "Should history ever become a true science, it must expect to establish its laws, not from the complicated story of rival European nationalities, but from the economical evolution of a great democracy." - 1333
• "In a democratic ocean science could see something ultimate. Man could go no further. The atom might move, but the general equilibrium could not change." - 1335

History of the United States of America during the Administrations of Thomas Jefferson by Henry Adams

• "Until they [Americans] were satisfied that knowledge was money, they would not insist upon high education; until they saw with their own eyes stones turned into gold, vapor into cattle and corn, they would not learn the meaning of science." - 53
• "The political partnership between the New York Republicans and the Virginians was from the first that of a business firm." - 80
• "Jefferson aspired beyond the ambition of a nationality, and embraced in his view the whole future of man...Hoping for a time when the world's ruling interests should cease to be local and should become universal; when questions of boundary and nationality should  become insignificant...he set himself to the task of governing, with the golden age in view." - 101
• "in the foreigner's range of observation, love of money was the most conspicuous and most common trait of American character." - 112
• "the new President found in the Constitutional power 'to regulate commerce with foreign nations' the machinery for doing away with navies, armies, and wars." - 144
• "as he privately declared and as was commonly believed, the actual office-holders were monarchists at heart, and could not be trusted to carry the new Republican principles into practice, the public welfare required great changes. For the first time in national experience, the use of patronage needed some definite regulation." - 152
• "The essence of Virginia republicanism lay in a single maxim: The government shall not be the final judge of its own powers." - 174
• "The whole of Jefferson's theory of internal politics...rested in the Act making an annual appropriation of $7,300,000 for paying interest and capital of the public debt; and in the Act for repealing the internal taxes." - 185
• April 30, 1802: "Perhaps the most important legislation of the year...authorized the people of Ohio to form a Constitution and enter the Union...Gallatin inserted into the law a contract, which bound the State and nation to set aside the proceeds of a certain portion of the public lands for the use of schools and for the construction of roads between the new State and the seaboard. This principle, by which education and internal improvements were taken under the protection of Congress, was a violation of the States-rights theories, against which, in after years, the strict constructionists protested" - 205
• "That the Spaniards should dread and hate the Americans was natural...In their eyes, United States citizens proclaimed ideas of free-trade and self-government with no other object than to create confusion, in order that they might profit by it." - 231
• "Peace is our passion, and wrongs might drive us from it. We prefer trying every other just principle, right and safety, before we would recur to war." - Jefferson, 300
• "Bonaparte had been taught by Talleyrand that America and England, whatever might be there mutual jealousies, hatred, or wars, were socially and economically one and indivisible." - 337
• "The Louisianians, it was said, had shed tears when they saw the American flag hoisted in place of the French; they were not prepared for self-government." - 385
• "The doctrines of 'strict construction' could not be considered as the doctrines of the government after they had been abandoned in this leading case [Louisiana] by a government controlled by strict constructionists." - 386
• "Jefferson wanted no treaties which could prevent him from using commercial weapons against nations that violated American neutrality; and therefore he reserved to Congress the right to direct commerce in whatever paths the Government might prefer." - 542
• "With nations, as with individuals, our interests, soundly calculated, will ever be found inseparable from our moral duties" - Jefferson, 603
• "It is beyond question that there exists in this country an infinite number of adventurers, without property, full of ambition, and ready to unite at once under the standard of a revolution which promises to better their lot." - 767
• "France [under Napoleon] had made all Europe violent and brutal; but England could boast that at the sound of British cannon the chaos had become order, that the ocean had been divided from the land, and as far as the ocean went, that her fleets made law. Two Powers only remained to be considered by Great Britain, -- Russia and the United States. Napoleon showed an evident intention to take charge of the one; England thought herself well able to give law to the other." - 876
• "In charging America with having lost her national character, Napoleon said no more than the truth. As a force in the affairs of Europe, the United States had become an appendage to England." - 1020
• "The Federalists of 1801 were the national party of America; The Federalists of 1808 were a British faction in secret league with George Canning." - 1094
• "the principle was thus settled that the Constitution, under the power to regulate commerce, conferred upon Congress the power to suspend foreign commerce forever; to suspend or otherwise regulate domestic inter-state commerce; to subject all industry to governmental control, if such interference in the opinion of Congress was necessary or proper for carrying out its purpose; and finally, to vest in the President discretionary power to execute or to suspend the system, in whole or in part." - 1111
• "He had undertaken to create a government which should interfere in no way with private action, and he had created one which interfered directly in the concerns of every private citizen in the land. He had come into power as the champion of States-rights, and had driven States to the verge of armed resistance. He had begun by claiming credit for stern economy, and ended by exceeding the expenditure of his predecessors. He had invented a policy of peace, and his invention resulted in the necessity of fighting at once the two greatest Powers in the world." - 1239