Ron Chernow is the author of “Hamilton,” the book that inspired Lin-Manuel Miranda’s hit musical. And in his 700-plus pages of remarkable insight, he does come to some remarkably shocking conclusions. One is that our founding fathers sucked at math.
It’s true. Hidden inside the compromise that relocated the nation’s capital from New York to Washington, were the numbers that doomed Washington, Madison and Jefferson to financial ruin and bankruptcy. By allowing New York to remain the financial capital, Hamilton played them brilliantly. Our nation’s architects failed to comprehend the power of money, and more specifically to their concerns, compound interest. As farmers, they leveraged their properties to the good times. When the bad times hit, they quickly lost everything. Having read hundreds of books, including Adam Smith’s “Wealth Of Nations,” Hamilton understood this significance better than almost anyone. He knew the compromise was nothing of the sort. The North had won; the Virginians literally had given away the farm.
Today, most Americans are like our founders, fundamentally, mathematically ignorant. Credit card debt, out of control student debt, and zero retirement planning cast a harsh shadow over the future for today’s Boomers, X’ers and Millennials.
And now we have Trump. The Trump tax plan is a ruse; it is nothing more than a huge tax break for the rich, sold to working people as a “swamp drainer.” His tax plan will create “millions of jobs; beautiful jobs.” But tax breaks don’t create jobs, demand does. And the only way to create demand is by increasing wages for the middle class and poor. They will then purchase more, and the economy will subsequently “heat up.”
That’s how you build economic growth; not by making it easier for Donny Jr. to buy another yacht. By reducing the corporate tax rate by 40%, one assumes that buried in those numbers, there is a quid pro quo for the American people. But there is no deal for the middle class and working poor. It’s more of the Reagan trickle-down nonsense. It didn’t work then and it won’t work now.
Trump claims to understand business, but he was born on third base and boasts to have hit a triple. The GOP PT Barnum approach to economics (a sucker born every minute) is creating debt that is unsustainable and threatens to choke our children and grandchildren’s futures.
For the record, Hamilton saved the nation. He assuaged the notion that debt is bad, and that we need a strong, central government. Federalist policies kept the early US from becoming another Europe, fractured and constantly warring. But it also concentrated power among the mathematically literate to create a financial system for the rich to wield as the wish; not for the good of the nation, but for themselves.
I know you were promised there’d be no math, but the test is changing. Just remember, politicians may lie, but numbers never do.