non-deflationist, central government planner here.

I never had the impression that what Jefferson, et al, had opposed was there being any government-central banking function- what they opposed was the British system of a private, merchant banking, money-creating scheme.

Which is what we have today.

This year we will probably extract about a Trillion or so inflated dollars out of our economy in order to pay those who have been granted the same noble privilege as the bankers we once defeated.

Better a 100 percent reserved, debt-free government-issue of new money.

Joe,

Rothbard wrote 3 books on banking which are quite similar.

1 What has government done to our money.

2 The case against the Fed

3 The Mystery of Banking

I list these in order of brevity. Each covers the essentials of money and banking but in increasing detail. The Mystery book has lots of charts and tables whereas the other two are simpler versions.

I own all three, and I believe all 3 can be found on line for free.

I would suggest reading either the first or second one and if that wets your appetite, get the mystery book if you want more details, and examples.

off topic:

Tim Duncan votes for Ron Paul and blasts smarmy reporters:

http://www.serioussportsnewsnetwork.com/2008/11/tim-duncan-writes-in-ron-paul.html

Chad pleased to make your acquaintance (at least virtually lol). I wish you the best on your future endeavors. I got my masters degree back in 1993 at the advice of a so called “industry expert” who told me I needed a graduate degree to compete in my field. It did nothing for me but create a barrier between me and my superiors (or maybe it was my pride or some combination of the 2). I failed macroeconomics in undergraduate school when I thought I was going to get a bachelors degree in business, the concepts seemed so foreign to me. But later I pursued engineering and mathematics fit right in, mostly objective reasoning.

I always felt ill in the workplace and I didn’t know why. I hated all the competition that was based on who you know versus what you knew and how well you could do it. I lost 3 jobs to females I believe to fullfill quotas, and not based on merit. I hold no hostility to females in the work place, my original mentor was a lady engineer and she was pretty good at it as well. But then about 4 years ago I finally read Atlas Shrugged by Ayn Rand and the light just seemed to go off in my head! I understood the game much better and a year later started my own consulting business. Things went well until about 6 months ago when the bubble popped now I am trying to understand why the bubble existed and it seems to all tie in together. Ayn Rand was very perceptive, although I disagree with her views on religion but that is another matter. Anyway, sorry for the rant, gotta let off some steam since the election was a sham and the Fed is creating more money everyday…….

Chad,

I had almost the same experience as you in 1978. The macro I was taught just didn’t make sense and my teachers couldn’t explain it. I didn’t put it together until I read Human Action by Mises and suddenly it all made sense, and I understood why my teachers couldn’t explain it. They couldn’t make sense of it either.

Now my caveat, approach Austrian Economics with the same skepticism. I have found Mises to be right on, but Rothbard often likes to hear himself speak without any foundations for some of his pronouncements. I have found some of Rothbard’s writing to be very valuable, such as his writing on the Great Depression, but too much is sound without substance.

DeLorenzo is much the same. For example here he writes an article on Central Banking in the 18th Century inplying that Hamilton and Morris were corrupt, but he quotes nothing from Hamilton, Jefferson, or Morris to support his point. He only quotes diatribes from Rothbard and makes the typical liberal class envy arguments that you can hear from almost any Democrat.

Not to flog a dead horse, but here a quote I found from Thomas Jefferson, I like it a lot:

“I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the general principle of the Constitution; I mean an additional article, taking from the federal government their power of borrowing.”

The reason that America copied the British system is that the British system was the most successful that the world had seen. The British were able to finance a whole series of wars from less people than France, their traditional enemy, and still win.
If you were a founding father, looking around at the economies of the world, why would you not conclude that the British system was the one to follow? Despite the loss of the US part of their empire, they managed to prosper as never before! The Industrial Revolution started in Britain because of the sound finances of Britain, offering security to lenders and financiers.
Libertarians might, and do, think that America would have done better without a centralised economy, but I can see why they believed that Britain had a system worth copying.

DiLorenzo wrote:

The Philadelphia businessman Morris had been a defense contractor during the Revolutionary War who “siphoned off millions from the public treasury into contracts to his own … firm and to those of his associates.” He was also “leader of the powerful Nationalist forces” in the new country.

Morris was a wealthy man before the Revolutionary War. He used his personal assets to fund a spy network for George Washington especially in New York, to supply provisions for Washington’s army at Valley Forge, to fund privateers to run the British blockade to bring needed supplies to the US army. In congress Morris was given the responsibility for finding the funds to keep Washington’s army alive. After the war Morris was actually less wealthy than when the war started. He died in 1806 in relative poverty.

The quote above makes a pure class envy argument. There is no foundation presented for these claims.

Sovereign nations defer control over the money supply for the most rediculous reasons. By condescending to those who want this power for themselves, they attempt to asure the public that the money supply is not in the hands of wasteful and distrustful politicions.
The sovereinty of the nation is compromised by doing so because, being forced to borrow from those to whom they defer this privilage, they ( the borrower) become servant to the lender. They also burdon the people with the added cost of interest,interest charges that compound every several years increasing the national debt and undermining the integrity and sovereignty of the nation and its currency.