Honoring America’s Hero, Alexander Hamilton

Honoring America’s Hero, Alexander Hamilton

By Robert E. Wright, Nef Family Chair of Political Economy at Augustana University and the Alexander Hamilton Awareness Society’s National Hamilton Scholar for 2017. My prepared remarks presented at the Weehawken, N.J. Elks Lodge, 11 July 2017

In many ways, words are like money. If the supply of money grows too quickly, the value of each dollar decreases and the economy experiences what we call inflation. Likewise, the value of each word is diminished in direct proportion to the number of times it is used. Hero is one such word. Since 1851, The New York Times has used the word hero in its pages almost half a million times. Almost a quarter of those uses occurred in the Third Millennium AD, or just the last 17 and a half years. That finding, by the way, isn’t determined by the length of the newspaper as the word hero was used more frequently in the 1870s and 1880s than in any subsequent decade until the 1980s, when its use took a strong upward trajectory that might be termed skyrocketing. It was certainly faster than the growth in the number of words published in the Old Gray Lady.

Because of inflation, when economic historians cite a nominal dollar figure from the distant past, we often remind readers or listeners that a dollar used to buy a lot more than it does today. How much more is more a matter of perspective than science. The website measuringworth dot com currently lists six different ways of comparing a dollar in 1790 with a dollar today and the estimates from those 6 methodologies vary from a low of $25 to a high of almost $100,000. Anyway you slice it, though, the dollar has depreciated an appreciable amount.

When I assert that Alexander Hamilton was “America’s Hero,” I mean that he was a hero in the 1790s’ sense of the word, not in today’s depreciated language. How many orders of magnitude different those are, I’ll leave for you, the listeners, to decide.

And, of course, I speak of the real Hamilton, not the protagonist, or hero if you will, of the musical Hamilton. I thought about calling Hamilton a superhero but decided that sounded too cartoon-ish. Hamilton was a real person, not a fictional character.

The real Hamilton was a real hero, an individual, as the Oxford English Dictionary put it, QUOTE admired or acclaimed for great qualities or achievements UNQUOTE. More specifically, Hamilton was a hero-leader and hero-founder, two subspecies of hero that help to found and lead new countries and institutions.

Hamilton has also been called a military hero for his actions on Revolutionary War battlefields from Princeton to Yorktown. Here, though, hero collapses into courageous at a time when capable officers who displayed courage under fire were a dime a dozen. Literally a dime a dozen if you accept the higher valuations of the dollar from measuringworth dot com.

Seriously, for an achievement to be termed great, as in large or important or, if I may, heroic, the achiever must be an indispensable component of the achievement. He, or she in the case of the heroine, cannot be merely another component or factor in the outcome, he must be the primary causal agent, the keystone or linchpin of the whole affair.

When I call Hamilton America’s Hero, I do not mean that America embraces Hamilton as its hero. It apparently does so at present, thanks in part to the popularity of the aforementioned musical, but to this day I cannot obtain employment teaching in a college or university history department, despite having published 18 history books, because Hamilton is anathema to the powers that be in academe and I am pro-Hamilton enough to have named my firstborn son Alexander Hamilton Was Wright. That’s right, his first name is Alexander, his two middle names are Hamilton and Was, and his last name sounds like correct but actually means a maker of things, as in Alexander Hamilton made America. I will not give the silly views of Hamilton’s critics a hearing here today but I thought them wrong when I earned my Ph.D. twenty years ago and today I know that they are wrong.

Hamilton is America’s Hero because he was indispensable to the nation’s founding and subsequent flourishing. Only his long-time friend George Washington was similarly heroic and, indeed, the two were indispensable to each other. We might consider them a heroic dyad, a binary star system, each grown stronger with the help of the other’s gravity … and gravitas. Had either of those luminaries perished at Valley Forge, or during that even more miserable but less well known winter at Morristown, we almost certainly would not live in a prosperous, united United States.

That claim, strong as it is, can strain credulity only in those who do not fully comprehend America’s precarious position even after Britain formally recognized its independence. Everything in America, or at least everything of importance, was a mess in 1785. Just a decade later, everything of importance was as perfect as was then humanly possible. One man was directly responsible for the sea change in the young nation’s affairs, and it certainly wasn’t Thomas Jefferson or any of his Virginian minions, it was the bastard brat of a Scotch pedlar, a precocious and well-vetted immigrant from the West Indies. Imagine that.

In 1785, the nation had several competing units of account and scarcely any money in circulation, save some state-issued paper bills of credit that lost value almost daily. In 1795, America enjoyed, thanks to Hamilton, a single unit of account, the U.S. dollar, and a sufficient supply of money, rendered stable in value because Hamilton legally linked it to the precious metals. Although disrupted by the Civil War, the U.S. monetary union has survived to this day and is largely responsible for the nation’s close economic and political integration.

In 1785, private credit was scarce because only a few banks existed. In 1795, the number of banks, and the amount of capital invested in banking, was growing because Hamilton wanted it that way. In addition to writing and supporting state bank charters, Hamilton induced Congress and Washington, above the self-serving din of Jefferson, to charter the Bank of the United States, a for-profit corporation that stymied the Panic of 1792 and kept the federal government’s finances in good repair.

In 1785, state taxes were so onerous that they stirred revolutionary discontent severe enough to raise the specter of successful tax rebellions in Massachusetts and elsewhere. In 1795, state taxes were light because the states had been relieved of their onerous Revolutionary-era debts by Hamilton’s assumption plan. Rather than threatening the social and political order, rebellions against federal taxes were mere annoyances, easily put down by the dyad and the gravitas of the new federal government.

In 1785, the national government and most of the state governments were bankrupt, unable to pay the interest due on their debts much less to discharge the principal. A decade later, the United States was among the most creditworthy nations in the world as judged by the price and quantity of its bonds traded in Amsterdam and London. America used its high credit standing to purchase new lands, like the Louisiana Territory, and fight important wars against slave masters and global tyrants. The high price of its bonds was proof that, for all its foibles, the U.S. federal government fundamentally respected property rights and was not going to bury itself in debt.

In fact, Hamilton helped to establish a sort of fiscal constitution that lasted for nearly two centuries. The first major rule was to borrow only when absolutely necessary and to establish the taxes needed to repay a new debt at the same time the debt was incurred so that everybody realized that borrowing was not free, just expedient in certain circumstances.

In 1785, the country was a loose collection of states, not a unified whole. In 1795, due to the widespread ownership of federal bonds, thousands of Americans looked to the federal government, not to their state governments, as the font of sovereignty. To protect their pecuniary interests, those bondholders, as Hamilton predicted, cemented the Union together when a host of forces, like slavery, threatened to tear it asunder.

In 1785, the young nation’s economy was largely agricultural and small-scale. It still was a decade later but growing numbers of corporations were already changing the structure of the economy, shifting it towards finance, transportation, and manufacturing. Hamilton led the way here by establishing the Society for the Establishment of Useful Manufactures in Paterson, New Jersey, which was meant to be a demonstration project, not a monopolistic behemoth as Hamilton’s detractors claimed. Hamilton also pioneered corporate governance rules that encouraged investment by small investors by limiting the voting powers of large investors in corporate elections.

Commerce, internal and international, nearly at a standstill in 1785, also became more important because of Hamilton. Despite numerous claims to the contrary, Hamilton was not in favor of protective tariffs. The taxes on imports that he suggested to Congress were revenue tariffs only, designed to maximize the federal government’s revenues, and hence its ability to service and repay its debt, not to protect specific domestic economic interests. Hamilton’s Report on Manufactures makes that point clear, but the long, complex document has been widely misinterpreted and misused by those who value partisan ideology over truth.

All of those policy reforms were made possible by the passage of the U.S. Constitution. While Hamilton played little role in most of the convention’s debates, he essentially called the convention together in Philadelphia in the summer of 1787 and, through his strenuous efforts writing as Publius in The Federalist Papers, as well as his role in New York’s ratification convention, Hamilton ensured the Constitution’s passage and its subsequent interpretation by generations of jurists. Judicial review, long one of the most important of our governmental checks and balances, also can be traced directly to Hamilton.

Had Hamilton lived another 20 years, as his two main detractors, John Adams and Thomas Jefferson had the good fortune to do, all of this would be much better understood. Instead, Hamilton’s legacy has been used, and abused, to support policies and politics that Hamilton abhorred. Had he lived, both of the leading causes of the Civil War, slavery and protective tariffs, would have been reduced if not eliminated and the horrors of that conflict, and its long aftermath, avoided. I daresay our GDP would be a third higher today had Burr’s bullet not found our hero’s abdomen.

Alas, the events that took place on this very ground ten score and a farmer’s dozen years ago ended both Hamilton’s heroic deeds and his ability, in what would have been his later, reflective years, to recount all that he had done for posterity. It has been left to scholars like Richard Brookhiser, David Cowen, Forrest McDonald, Michael Newton, Richard Sylla, and a handful of others to piece together Hamilton’s many contributions to America and its prosperity and to speculate about his future heroism. But rather than lament what would have been, we should rejoice in what was, and honor Hamilton for being our hero, America’s Hero, the man, along with Washington, most responsible for this country’s greatness, past and present. We cannot resurrect Hamilton himself, but we can certainly resurrect his insights to guide us through the troubled times ahead.

Honor is another word that has lost value over time. In Hamilton’s time, to honor somebody was to repay him or her full principal and interest. Applying that concept today is subject to interpretation, but I would say what we owe to Hamilton is the Truth, as close as we can comprehend it. That means, at a minimum, not make clearly false statements about the man. So don’t claim that a statesman who wanted an energetic government wanted a big government, that a poor bastard was an aristocrat, that somebody who wanted checks and balances to apply to everyone was a monarchist, that a financier who built an amortization clause into his bonds and who stressed that a national debt could become excessive wanted a large, perpetual national debt, or that an economist who simply discussed the microeconomic effects of protective tariffs wanted to implement them. Honor Hamilton, honor Burr, honor all of the Founders by studying their own words and actions or at least by reading the best, most honest scholarship about them available.

Thank you!

Hamilton and the Economics of Slavery

Hamilton and the Economics of Slavery

Robert E. Wright, Nef Family Chair of Political Economy, Augustana University

Prepared remarks given 7/10/17 at Fraunces Tavern Museum: 

http://www.frauncestavernmuseum.org/evening-lecture-series/ 

            I don’t think that Alexander Hamilton lived long enough, or did enough in the cause of antislavery, to quite deserve the label ABOLITIONIST, i.e., a person who actively sought to end slavery throughout the United States. While his hands were not entirely clean when it came to the ownership of other human beings, they were much, much cleaner than those of most of the Founders, including those of his mentor, George Washington. Part of this was the mere luck of being born poorer than any other Founder, or certainly any of the major Founders, with the possible exception of Franklin, who probably not coincidentally also came to hold antislavery views. But Hamilton’s brushes with slavery as an adult were also due more to chance than design. I’m thinking here of his marriage into one of New York’s wealthiest families and his long residency in Manhattan, that part of his adopted state most amenable to the peculiar institution.

            Had more of his correspondence survived, or indeed if Hamilton himself had lived long enough to find the leisure time to wax eloquent about his views, we would enjoy a much more definitive understanding of Hamilton’s views on slavery. As matters actually stand, we have to piece together the most plausible story we can, which I think would conclude that Hamilton, had he lived, would have developed economic abolitionism decades before Hinton Helper did.

            Economic abolitionism is much less studied and understood than its moral cousin, or what we might call mainstream abolitionism. For most abolitionists, slavery was immoral, plain and simple, because it was an abomination unto the Lord and/or unto natural reason or natural law. Many mainstream abolitionists did not, and would not, discuss the economic aspects of slavery. Most were not deep economic thinkers and intuited that they would lose any economic argument with slaveholders. Others grudgingly conceded that slavery was an economic good but found it repulsive to even think about exchanging material well-being for the suffering of the enslaved.

            The great classical economist Adam Smith took a stab at economic abolitionism and failed badly. He argued that, regardless of race, free people were always more productive than slaves because the latter had but paltry incentive to work hard or smart. All they would do was the bare minimum to avoid punishment and they would resist and steal at every opportunity, views also held by Franklin. Smith, a careful student of history, had to concede that the world had always been full of enslavers, which he explained proved only that people really liked to enslave others. Nobody who saw firsthand the large profits produced by many slave plantations could follow Smith’s weak brand of economic abolitionism.

            What finally convinced people that slavery was bad for the economy, that it reduced real per capita output and stymied development, was the concept of pollution, or what economists today call negative externalities. Everyone knew that, say, a tannery could be fabulously profitable but destroy a sizable town downstream. Total economic activity was therefore not the sum of private profits, it was the sum of private profits minus the costs of pollution, and other negative externalities. Ergo, slave plantations could be profitable but actually hurt the overall economy by creating costs borne by the rest of society. Enslavers’ profits were, in essence, stolen not only from the enslaved but from non-slaveholders as well.

The notion that slavery created large negative externalities percolated for centuries before culminating in Hinton Helper’s 1857 opus, The Impending Crisis of the South. That the enslavement of others enriched a few at the expense of the whole can be dated to sixteenth century French philosopher Jean Bodin, who argued that the profits created by slaves were offset by the fear induced by the institution in both slaves and the general population. As Bodin put it, slave societies were quote always in daunger of trouble and ruine, by the conspiracie of slaves combining themselves together: All Histories being full of servile rebellions and warres. unquote Johann Gottfried Herder, an eighteenth century German scholar, also clearly saw that slavery created social costs not borne by enslavers. His major example of a negative externality caused by slavery was the spread of syphilis, which devastated three continents.

The idea that slavery imposed large costs on non-slaveholders gained traction in early nineteenth century America. In 1805, Philadelphia’s Thomas Branagan compared slavery quote to a large tree planted in the south, whose spreading branches extends to the North; the poisonous fruit of that tree when ripe falls upon these states, to the annoyance of the inhabitants, and contamination of the land which is sacred to liberty. unquote George Mason had also likened slavery to a quote unquote slow Poison and in 1832, following a slave rebellion, fellow Virginian Henry Berry argued that slavery was akin to raising tigers, something the state certainly had an interest in arresting, even if it was quote a very lucrative business. unquote Virginians would not be allowed to raise the Upas tree or Tree of Death, Berry argued, even if it grew entirely on their own private land. In that same debate, Charles James Faulkner stated the matter directly: quote Slaves are injurious to the interests and threaten the subversion and ruin of this Commonwealth. Unquote

In 1833 British abolitionist Joseph Conder argued that free laborers cost society less than slaves did because slavery encouraged quote a wasteful and deteriorating husbandry unquote due to its reliance on monoculture and primitive tools as well as quote contingent social evils, which demand a precautionary provision unquote. The ultimate cost of slavery, he concluded, also included quote the state expenditure which it renders necessary in order to provide against the dangers inseparable from the existence of a servile class. Unquote

Former Kentucky slaveholder Cassius Clay converted to the antislavery cause after he took up a methodology, first tried in 1824, of comparing the economies of free and slave states. Despite Virginia’s natural advantages over New York, he noted, the latter exceeded the former in quote the elements of National prosperity and glory; wealth, numbers in new countries, literature, industry, the mechanic arts, scientific agriculture, &c. unquote Slavery, Clay concluded, was clearly to blame for Virginia’s economic retardation. Quote The twelve hundred millions of capital invested in slaves is a dead loss to the South, unquote he declared, predicting, accurately, that the free North would defeat the slave South in a civil war.

Helper took those hints and ran with them. Although his execution proved poor in places, Helper showed in devastating detail that the free states were economically superior to comparable slave states and then convincingly argued that slavery was the culprit because of the pollution necessarily created when holding millions of human beings in abject bondage. Republican politicians soon extended Helper’s ideas to claim that enslavers effectively taxed Northern workers in several ways, only the most palpable of which was the Fugitive Slave Act. The South’s poor whites were probably the biggest non-slave victims of slavery because enslavers did not support public education or quality transportation systems that would have allowed Buckram, as they were derisively known, from having a shot at bettering their condition. Who then would man the nightly slave patrols that allowed enslavers to sleep?

So slavery was not just a moral atrocity, it was economic theft en masse, one well worth fighting to end. During the Civil War, bona fide economists like John Elliott Cairnes adopted the negative externalities view of slavery. Cairnes argued:

QUOTE Those who are acquainted with the elementary principles which govern the distribution of wealth, know that the profits of capitalists may be increased by the same process by which the gross revenue of a country is diminished, and that therefore the community as a whole may be impoverished through the very same means by which a portion of its number is enriched. The economic success of slavery, therefore, is perfectly consistent with the supposition that it is prejudicial to the material well-being of the country where it is established. UNQUOTE

That remained the orthodox view until about 2010. The debate sparked by Time on the Cross in the 1970s was more about the relative efficiency of free and slave labor. All Fogel and Engerman did was to re-establish that Smith and Franklin were wrong, that slaves could be more efficient than free laborers under certain circumstances. In the twenty teens some so-called historians of capitalism began to argue something much broader, that slavery made the U.S. and U.K. wealthy. Economic historians have successfully attacked their sloppy work, which hopefully has been completely put to bed by my book The Poverty of Slavery: How Unfree Labor Pollutes the Economy, which came out of Palgrave this spring and copies of which are available for sale here.

Killing off the notion that slavery can cause economic growth and development will be an important victory for the modern antislavery movement. Slavery, you see, did not end in the nineteenth century in the U.S., or anywhere else for that matter, it merely changed names and forms into debt peonage, bonded labor, white slavery, and child exploitation. Today, we call it by such euphemisms as sex trafficking and unfree labor. Although the percentage of people enslaved today globally is less than it probably has been at any point in world history, 30 to 40 million people remain enslaved worldwide and that is 30 to 40 million too many. We did not need some Ivory Tower, Ivy League historians to strengthen modern slavery by claiming, more out of ideological conviction to support reparations claims than an understanding of economic growth processes, that slavery can stimulate economic growth and development.

            Of course, those are the same types of scholars who don’t understand Alexander Hamilton’s contribution to modern America very well. Hamilton wasn’t a royalist, he was a republican, of the constitutional monarchist variety at times, but not because he was an aristocrat. As noted earlier, he came from a very humble background. He wanted strong checks on each of the three branches of government in case a demagogue ever became president (as if!), Speaker of the House, or chief justice of the Supreme Court. Even when he spoke of constitutional monarchy, Hamilton did not advocate an authoritarian state, but rather sought bulwarks against tyranny, specifically the tyranny of the majority.

As I show in One Nation Under Debt: Hamilton, Jefferson, and the History of What We Owe, copies of which are available for sale here, what Hamilton ultimately wanted was an energetic government that provided public goods as efficiently as possible. That meant providing national defense and protection of citizens’ lives, liberty, and property at the lowest possible cost. Hamilton did not want a big government by today’s standards, he wanted one bigger than that desired by Thomas Jefferson, which Hamilton believed would be too weak to protect the young United States from foreign threats. Jefferson did not want an energetic federal government because it threatened slavery; he and his slaveholding followers hated Hamilton because they feared that he was the man most capable of threatening the peculiar institution.

Hamilton did not want any person to be under the absolute control of another, even a political leader. So at the end of his pamphlet The Farmer Refuted, Hamilton made clear that he was convinced that quote the whole human race … [was] intitled [to] civil liberty, … [which he considered] in a genuine unadulterated sense … [to be] the greatest of terrestrial blessings. unquote Importantly, Hamilton believed that people of all races were fully human. When he said that all men had the right to the administration of justice, there was no implied asterisk by the word men. I can’t credibly argue that Hamilton held no racial prejudices but belief in the systematic exclusion of any group of citizens from civil society was not among his shortcomings.

In a letter to John Jay in 1779, Hamilton believed that “negroes,” a polite term for African-Americans at the time, would quote make very excellent soldiers, with proper management … [because] their natural faculties are probably as good as ours unquote. Whites, Hamilton lamented, were quote taught … contempt … for the blacks [which made them] fancy many things [about Negroes] that are founded neither in reason nor experience unquote. One might dismiss such sentiments as so much fodder in favor of Hamilton’s desire to enlist African-American troops for the cause but Hamilton also wrote that quote the dictates of humanity and true policy equally interest me in favour of this unfortunate class of men unquote. He thought that arming blacks would not only allow them to defend themselves but also spur slaves to shake off their shackles.

In 1785, Hamilton helped to form the New York Society for Promoting the Manumission of Slaves, an NGO that encouraged New Yorkers to let their slaves go free and that hoped to prevent their re-enslavement, or the kidnapping and enslavement of free blacks, through registration. Three years later, Hamilton’s good friend, the Marquis de Lafayette, updated Hamilton on France’s new policies quote Respecting the Negroe trade, and slavery unquote. He then begged Hamilton to subscribe him to the anti-slavery societies in New York and elsewhere. Hamilton remained a member of the society until his death, and was elected counsellor of the society in 1803, but he was active only in spurts because his overriding goal was preservation of the precarious Union that he had helped forge. Without the Union, the liberties of all Americans, black and white, would be endangered.

When commenting on the Jay Treaty, which he generally favored, Hamilton approved of the emancipation of American slaves during the Revolution by the British because quote it would have been still more infamous to have surrendered them [freed slaves] to their Masters unquote. The peace treaty, Hamilton noted, did not require the British to restore property, just to not carry any away. But once captured by the British, slaves were freed and hence stopped being property.

            In addition to opposing slavery on moral grounds, Hamilton clearly understood the concept of externalities, both positive and negative. In his report on manufactures, Hamilton noted that manufacturing created positive economic spillovers, specifically an increase in quote unquote ingenuity. Hamilton also noted that alcohol consumption created negative externalities, like decreased productivity, which is why he personally preferred strong coffee over arduous spirits. In his report on the Bank of the United States, Hamilton argued that by printing too much fiat paper money, governments could create negative externalities in the form of an inflationary bubble quote incompatible with the regular and prosperous course of the political economy unquote.

            All that remained for Hamilton to become an economic abolitionist was to observe the economic differences between slave and non-slave states and to explain their differences by referencing negative externalities. When he died in 1804, the differences between North and South, and free and slave, were not yet as palpable as they would become. Had he lived into the 1820s or 1830s, as Jefferson, Adams, and Madison did, Hamilton would certainly have learned of the increasing economic differences between the two sections and put his keenly analytical mind to explaining why. As I show in One Nation Under Debt, Hamilton was nothing short of an economic genius. There is no doubt that he was economically more astute than any of the economic abolitionists, including Cassius Clay, Hinton Helper, or even J. E. Cairnes. It is difficult to believe that he would have missed the application of negative externalities to slavery.

Albert Gallatin, America’s second greatest treasury secretary, was born just a few years after Hamilton, and lived until 1849. Although a member of Jefferson’s entourage, Gallatin long opposed slavery.[1] Like Hamilton, Gallatin was a member of his adopted state’s abolition society in the 1790s. While lamenting the loss of innocent lives in the Haiti uprising, he believed the uprising itself just retribution for “the crimes of so many generations of slave-traders and slave-holders,” a sentiment similar to one that Hamilton expressed during his 1789 eulogy of Revolutionary War General Nathanael Greene that rendered him persona non grata with the Jeffersonian slaveholding elite. Unsurprisingly, Gallatin did what he could to stop the expansion of slavery into new U.S. territories but at the same time admitted he was tempted to buy slaves to help build his estate in western Pennsylvania. He resisted the temptation, though, and in one of his last public acts he opposed the annexation of Texas, and the subsequent war with Mexico, on general antislavery grounds.

Although antislavery in principle, Gallatin was no abolitionist because, like Edward Everett, he ultimately valued the Union over the lives of slaves.[2] Gallatin therefore spent his last years studying the plight of American Indians instead of slaves. Moreover, slavery remained simply a moral problem for Gallatin as well as for Everett. Hamilton was too astute an economist not to have discovered economic abolitionism. Although he, too, would have been loath to endanger the Union, he would have seen, as Helper and others later did, that slavery was not only a political threat to the Union, it was an economic threat because it created two economies – not one slave and one capitalist, whatever that means – but one a horrid Southern vampire that sucked resources out of the other by imposing massive negative externalities on it. The most telling evidence of that fact is that the Confederate states seceded not because Lincoln threatened to free the slaves but because he threatened merely to remove federal subsidies for slavery. Without those subsidies, slavery would have unraveled, and perhaps in an ugly way. Now imagine Hamilton during the Missouri or Nullification crisis arguing, in his usual indomitable way, that federal subsidies for slavery, which ranged from the postal service to river clearing to fugitive slave laws, had to cease. I think the South would have capitulated but worst case scenario the North would have won the Civil War in the early 1820s or 1830s instead of the 1860s.

Thank you!

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[1] Henry Adams, The Life of Albert Gallatin (Philadelphia: J. B. Lippincott & Co., 1879), 86, 109-10, 209, 259, 406, 671-74.

[2] Matthew Mason, Apostle of Union: A Political Biography of Edward Everett (Chapel Hill: University of North Carolina Press, 2016).

Once Again, the Tax Law Gets Mortgages Backwards

The Trump tax plan has many interesting features but it gets homeownership incentives all wrong. As I have noted before, if policymakers were really interested in financing home ownership (as opposed to "renting from the bank") it should provide a tax deduction for paying down the PRINCIPAL of a home mortgage, not for paying interest. Paying down principal means acquiring more equity in the home, i.e., moving closer to actual ownership, in fee, without encumbrances. The current system, continued under the Trump plan, provides incentives to increase leverage (decrease equity) and keep it high. It is a great boon to the real estate and banking industries but does not help Americans to save for the future as they once did.

The Case for Slavery Reparations Rests on a False Assumption

Read the final version on the History News Network: http:historynewsnetwork.org/article/165483

by Robert E. Wright

 

The Case for Slavery Reparations Rests on a False Assumption

Teaser:  The assumption is that slavery enriched the country.  It actually impoverished America.

Robert E. Wright, the Nef Family Chair of Political Economy at Augustana University, is the author of The Poverty of Slavery: How Unfree Labor Pollutes the Economy.

Horses numbering some 6.2 million. Over 1.1 million asses and mules and 2.2 million oxen. Over 8.5 million milch cows and 14.7 million other head of cattle. Almost 21.6 million sheep and 33.5 million hogs. Some 163 million acres under the plow. Farming implements and machines worth $245 million. Almost $98.6 million worth of cotton manufacturing equipment, $31 million of woollen manufacturing equipment, $23.4 million in boot and shoe manufacturing equipment, and many more millions, in sum, invested in scores of other types of manufacturing industries. Workers numbering 11.1 million, of whom almost 2.34 million were enslaved. All were important factors in an economy that created $4.4 billion of final goods in 1860 ($88.7 billion in today’s dollars).*

None of those classical factors of production (land, labor, and capital),** however, rightly could be said to have caused the creation of those final goods. Businesses (ranging from sole proprietorships to publicly traded corporations) cleared land, acquired or created capital, and hired or enslaved laborers for the purpose of creating goods that they hoped to sell for a profit. The expectation of profit was what caused production. Businesses expected a chance to earn a profit because the American government had credibly committed to protecting the lives, liberty, and property of business owners. Alexander Hamilton correctly averred that economies grow and development when governments successfully protect property from threats both foreign and domestic. The factors of production delineated above were not unimportant but they were, ultimately, effects rather than causes.

In recent years, several scholars have tried to raise one of those effects, slaves, into a, if not the, cause of economic growth in the United States and the United Kingdom. Economist historians have criticized many of the more technical aspects of that attempt, especially the claim that cotton productivity grew in the late antebellum decades mainly because masters learned how to force slaves to work harder. Alan Olmstead and Paul Rhode, for example, have convincingly countered that new strains of cotton were easier to pick and produced higher yields.

Neo-abolitionist scholars are also uneasy with the claim, not heard since the proslavery rantings of people like George Fitzhugh, that slavery can induce economic growth. Such claims, unsubstantiated as they are, undermine the efforts of NGOs like Free the Slaves to reduce the number of people forced to labor today, which most estimates place at above 30 million.

My view, detailed in The Poverty of Slavery: How Unfree Labor Pollutes the Economy, is that slaves are the least likely candidate to be, or to have been, a growth driver. As hinted by the subtitle, the book shows that slavery creates negative externalities that swamp the marginal benefits of slave labor by several orders of magnitude. Negative externalities are costs not borne by participants in a given market (buyers or sellers). The prime textbook example of a negative externality is pollution: factory owners (and their customers) benefit from spewing pollutants into the environment but that injures everyone else so, hopefully, the government imposes regulations to stop or tax it.

Slavery was (and remains) no different. Enslavers do everything in their power to get society to pay for the high costs of controlling their human minions, very few of whom want to be enslaved. Throughout history, including the U.S. antebellum South, enslavers have used taxpayer monies to discipline their slaves, put down rebellions, return runaways, and so forth. They distorted republican governance processes to further their ends and deliberately stymied economic development (literacy, communications, transportation infrastructure, etc.).

In the process, enslavers profited and became wealthy. But the profits they generated were not much higher than they would have earned using the next most profitable type of labor. So the marginal benefit of slavery was small, while its aggregate cost was enormous. The conclusion is inevitable: while slaves were important, the U.S. South and every other slave society throughout history would have created more output without slavery. In addition to being immoral, slavery created poverty, not wealth, and for both reasons should be extirpated from the globe once and for all.

This conclusion leaves little room for scholars who would like to see reparations paid to African-Americans descended from slaves. That effort is on shaky moral ground anyway because slavery was a ubiquitous institution throughout most of human existence, so nary a person alive today, regardless of the complexion of his or her skin, is not descended from at least one slave and at least one slaveholder. The best case for reparations, therefore, lay not in old forms of slavery but in forced labor today, particularly the millions of living victims of America’s overgrown carceral state.

*All figures are from the 1860 U.S. Census except for GDP, which is from MeasuringWorth.com, and the number of total and enslaved workers, which is from Stanley Lebergott, “Labor Force and Employment, 1800-1960,” in Dorothy Brady, ed. Output, Employment, and Productivity in the United States After 1800 [NBER, 1966], Table 1.

**https://en.wikipedia.org/wiki/Factors_of_production

by Robert E. Wright

This conclusion leaves little room for scholars who would like to see reparations paid to African-Americans descended from slaves. That effort is on shaky moral ground anyway because slavery was a ubiquitous institution throughout most of human existence, so nary a person alive today, regardless of the complexion of his or her skin, is not descended from at least one slave and at least one slaveholder. The best case for reparations, therefore, lay not in old forms of slavery but in forced labor today, particularly the millions of living victims of America’s overgrown carceral state.
*All figures are from the 1860 U.S. Census except for GDP, which is from MeasuringWorth.com, and the number of total and enslaved workers, which is from Stanley Lebergott, “Labor Force and Employment, 1800-1960,” in Dorothy Brady, ed. Output, Employment, and Productivity in the United States After 1800 [NBER, 1966], Table 1.
- See more at: http://historynewsnetwork.org/article/165483#sthash.ve8XTYkk.dpuf

Horses numbering some 6.2 million. Over 1.1 million asses and mules and 2.2 million oxen. Over 8.5 million milch cows and 14.7 million other head of cattle. Almost 21.6 million sheep and 33.5 million hogs. Some 163 million acres under the plow. Farming implements and machines worth $245 million. Almost $98.6 million worth of cotton manufacturing equipment, $31 million of woollen manufacturing equipment, $23.4 million in boot and shoe manufacturing equipment, and many more millions, in sum, invested in scores of other types of manufacturing industries. Workers numbering 11.1 million, of whom almost 2.34 million were enslaved. All were important factors in an economy that created $4.4 billion of final goods in 1860 ($88.7 billion in today’s dollars).*
None of those classical factors of production (land, labor, and capital), however, rightly could be said to have caused the creation of those final goods. Businesses (ranging from sole proprietorships to publicly traded corporations) cleared land, acquired or created capital, and hired or enslaved laborers for the purpose of creating goods that they hoped to sell for a profit. The expectation of profit was what caused production. Businesses expected a chance to earn a profit because the American government had credibly committed to protecting the lives, liberty, and property of business owners. Alexander Hamilton correctly averred that economies grow and development when governments successfully protect property from threats both foreign and domestic. The factors of production delineated above were not unimportant but they were, ultimately, effects rather than causes.
In recent years, several scholars have tried to raise one of those effects, slaves, into a, if not the, cause of economic growth in the United States and the United Kingdom. Economist historians have criticized many of the more technical aspects of that attempt, especially the claim that cotton productivity grew in the late antebellum decades mainly because masters learned how to force slaves to work harder. Alan Olmstead and Paul Rhode, for example, have convincingly countered that new strains of cotton were easier to pick and produced higher yields.
Neo-abolitionist scholars are also uneasy with the claim, not heard since the proslavery rantings of people like George Fitzhugh, that slavery can induce economic growth. Such claims, unsubstantiated as they are, undermine the efforts of NGOs like Free the Slaves to reduce the number of people forced to labor today, which most estimates place at above 30 million.
My view, detailed in The Poverty of Slavery: How Unfree Labor Pollutes the Economy, is that slaves are the least likely factor in the growth of the economy. As hinted by the subtitle, the book shows that slavery creates negative externalities that swamp the marginal benefits of slave labor by several orders of magnitude. Negative externalities are costs not borne by participants in a given market. The prime textbook example of a negative externality is pollution: factory owners (and their customers) benefit from spewing pollutants into the environment but that harms everyone else so, hopefully, the government imposes regulations to stop or tax it.
Slavery was (and remains) no different. Enslavers do everything in their power to get society to pay for the high costs of controlling their human minions. Throughout history, including the U.S. antebellum South, enslavers used taxpayer monies to discipline their slaves, put down rebellions, return runaways, and so forth. They distorted republican governance processes to further their ends and deliberately stymied economic development (literacy, communications, transportation infrastructure, etc.).
In the process, enslavers profited and became wealthy. But the profits they generated were not much higher than they would have earned using the next most profitable type of labor. So the marginal benefit of slavery was small, while its aggregate cost was enormous. The conclusion is inevitable: while slaves were important, the U.S. South and every other slave society throughout history would have created more output without slavery. In addition to being immoral, slavery created poverty, not wealth, and for both reasons should be extirpated from the globe once and for all.
This conclusion leaves little room for scholars who would like to see reparations paid to African-Americans descended from slaves. That effort is on shaky moral ground anyway because slavery was a ubiquitous institution throughout most of human existence, so nary a person alive today, regardless of the complexion of his or her skin, is not descended from at least one slave and at least one slaveholder. The best case for reparations, therefore, lay not in old forms of slavery but in forced labor today, particularly the millions of living victims of America’s overgrown carceral state.
*All figures are from the 1860 U.S. Census except for GDP, which is from MeasuringWorth.com, and the number of total and enslaved workers, which is from Stanley Lebergott, “Labor Force and Employment, 1800-1960,” in Dorothy Brady, ed. Output, Employment, and Productivity in the United States After 1800 [NBER, 1966], Table 1.
- See more at: http://historynewsnetwork.org/article/165483#sthash.ve8XTYkk.dpuf

by Robert E. Wright Robert E. Wright, the Nef Family Chair of Political Economy at Augustana University, is the author of The Poverty of Slavery: How Unfree Labor Pollutes the Economy.

Horses numbering some 6.2 million. Over 1.1 million asses and mules and 2.2 million oxen. Over 8.5 million milch cows and 14.7 million other head of cattle. Almost 21.6 million sheep and 33.5 million hogs. Some 163 million acres under the plow. Farming implements and machines worth $245 million. Almost $98.6 million worth of cotton manufacturing equipment, $31 million of woollen manufacturing equipment, $23.4 million in boot and shoe manufacturing equipment, and many more millions, in sum, invested in scores of other types of manufacturing industries. Workers numbering 11.1 million, of whom almost 2.34 million were enslaved. All were important factors in an economy that created $4.4 billion of final goods in 1860 ($88.7 billion in today’s dollars).*
None of those classical factors of production (land, labor, and capital), however, rightly could be said to have caused the creation of those final goods. Businesses (ranging from sole proprietorships to publicly traded corporations) cleared land, acquired or created capital, and hired or enslaved laborers for the purpose of creating goods that they hoped to sell for a profit. The expectation of profit was what caused production. Businesses expected a chance to earn a profit because the American government had credibly committed to protecting the lives, liberty, and property of business owners. Alexander Hamilton correctly averred that economies grow and development when governments successfully protect property from threats both foreign and domestic. The factors of production delineated above were not unimportant but they were, ultimately, effects rather than causes.
In recent years, several scholars have tried to raise one of those effects, slaves, into a, if not the, cause of economic growth in the United States and the United Kingdom. Economist historians have criticized many of the more technical aspects of that attempt, especially the claim that cotton productivity grew in the late antebellum decades mainly because masters learned how to force slaves to work harder. Alan Olmstead and Paul Rhode, for example, have convincingly countered that new strains of cotton were easier to pick and produced higher yields.
Neo-abolitionist scholars are also uneasy with the claim, not heard since the proslavery rantings of people like George Fitzhugh, that slavery can induce economic growth. Such claims, unsubstantiated as they are, undermine the efforts of NGOs like Free the Slaves to reduce the number of people forced to labor today, which most estimates place at above 30 million.
My view, detailed in The Poverty of Slavery: How Unfree Labor Pollutes the Economy, is that slaves are the least likely factor in the growth of the economy. As hinted by the subtitle, the book shows that slavery creates negative externalities that swamp the marginal benefits of slave labor by several orders of magnitude. Negative externalities are costs not borne by participants in a given market. The prime textbook example of a negative externality is pollution: factory owners (and their customers) benefit from spewing pollutants into the environment but that harms everyone else so, hopefully, the government imposes regulations to stop or tax it.
Slavery was (and remains) no different. Enslavers do everything in their power to get society to pay for the high costs of controlling their human minions. Throughout history, including the U.S. antebellum South, enslavers used taxpayer monies to discipline their slaves, put down rebellions, return runaways, and so forth. They distorted republican governance processes to further their ends and deliberately stymied economic development (literacy, communications, transportation infrastructure, etc.).
In the process, enslavers profited and became wealthy. But the profits they generated were not much higher than they would have earned using the next most profitable type of labor. So the marginal benefit of slavery was small, while its aggregate cost was enormous. The conclusion is inevitable: while slaves were important, the U.S. South and every other slave society throughout history would have created more output without slavery. In addition to being immoral, slavery created poverty, not wealth, and for both reasons should be extirpated from the globe once and for all.
This conclusion leaves little room for scholars who would like to see reparations paid to African-Americans descended from slaves. That effort is on shaky moral ground anyway because slavery was a ubiquitous institution throughout most of human existence, so nary a person alive today, regardless of the complexion of his or her skin, is not descended from at least one slave and at least one slaveholder. The best case for reparations, therefore, lay not in old forms of slavery but in forced labor today, particularly the millions of living victims of America’s overgrown carceral state.
*All figures are from the 1860 U.S. Census except for GDP, which is from MeasuringWorth.com, and the number of total and enslaved workers, which is from Stanley Lebergott, “Labor Force and Employment, 1800-1960,” in Dorothy Brady, ed. Output, Employment, and Productivity in the United States After 1800 [NBER, 1966], Table 1.

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- See more at: http://historynewsnetwork.org/article/165483#sthash.ve8XTYkk.dpuf

Horses numbering some 6.2 million. Over 1.1 million asses and mules and 2.2 million oxen. Over 8.5 million milch cows and 14.7 million other head of cattle. Almost 21.6 million sheep and 33.5 million hogs. Some 163 million acres under the plow. Farming implements and machines worth $245 million. Almost $98.6 million worth of cotton manufacturing equipment, $31 million of woollen manufacturing equipment, $23.4 million in boot and shoe manufacturing equipment, and many more millions, in sum, invested in scores of other types of manufacturing industries. Workers numbering 11.1 million, of whom almost 2.34 million were enslaved. All were important factors in an economy that created $4.4 billion of final goods in 1860 ($88.7 billion in today’s dollars).*
None of those classical factors of production (land, labor, and capital), however, rightly could be said to have caused the creation of those final goods. Businesses (ranging from sole proprietorships to publicly traded corporations) cleared land, acquired or created capital, and hired or enslaved laborers for the purpose of creating goods that they hoped to sell for a profit. The expectation of profit was what caused production. Businesses expected a chance to earn a profit because the American government had credibly committed to protecting the lives, liberty, and property of business owners. Alexander Hamilton correctly averred that economies grow and development when governments successfully protect property from threats both foreign and domestic. The factors of production delineated above were not unimportant but they were, ultimately, effects rather than causes.
In recent years, several scholars have tried to raise one of those effects, slaves, into a, if not the, cause of economic growth in the United States and the United Kingdom. Economist historians have criticized many of the more technical aspects of that attempt, especially the claim that cotton productivity grew in the late antebellum decades mainly because masters learned how to force slaves to work harder. Alan Olmstead and Paul Rhode, for example, have convincingly countered that new strains of cotton were easier to pick and produced higher yields.
Neo-abolitionist scholars are also uneasy with the claim, not heard since the proslavery rantings of people like George Fitzhugh, that slavery can induce economic growth. Such claims, unsubstantiated as they are, undermine the efforts of NGOs like Free the Slaves to reduce the number of people forced to labor today, which most estimates place at above 30 million.
My view, detailed in The Poverty of Slavery: How Unfree Labor Pollutes the Economy, is that slaves are the least likely factor in the growth of the economy. As hinted by the subtitle, the book shows that slavery creates negative externalities that swamp the marginal benefits of slave labor by several orders of magnitude. Negative externalities are costs not borne by participants in a given market. The prime textbook example of a negative externality is pollution: factory owners (and their customers) benefit from spewing pollutants into the environment but that harms everyone else so, hopefully, the government imposes regulations to stop or tax it.
Slavery was (and remains) no different. Enslavers do everything in their power to get society to pay for the high costs of controlling their human minions. Throughout history, including the U.S. antebellum South, enslavers used taxpayer monies to discipline their slaves, put down rebellions, return runaways, and so forth. They distorted republican governance processes to further their ends and deliberately stymied economic development (literacy, communications, transportation infrastructure, etc.).
In the process, enslavers profited and became wealthy. But the profits they generated were not much higher than they would have earned using the next most profitable type of labor. So the marginal benefit of slavery was small, while its aggregate cost was enormous. The conclusion is inevitable: while slaves were important, the U.S. South and every other slave society throughout history would have created more output without slavery. In addition to being immoral, slavery created poverty, not wealth, and for both reasons should be extirpated from the globe once and for all.
This conclusion leaves little room for scholars who would like to see reparations paid to African-Americans descended from slaves. That effort is on shaky moral ground anyway because slavery was a ubiquitous institution throughout most of human existence, so nary a person alive today, regardless of the complexion of his or her skin, is not descended from at least one slave and at least one slaveholder. The best case for reparations, therefore, lay not in old forms of slavery but in forced labor today, particularly the millions of living victims of America’s overgrown carceral state.
*All figures are from the 1860 U.S. Census except for GDP, which is from MeasuringWorth.com, and the number of total and enslaved workers, which is from Stanley Lebergott, “Labor Force and Employment, 1800-1960,” in Dorothy Brady, ed. Output, Employment, and Productivity in the United States After 1800 [NBER, 1966], Table 1.
- See more at: http://historynewsnetwork.org/article/165483#sthash.ve8XTYkk.dpuf

The Case for Slavery Reparations Rests on a False Assumpt - See more at: http://historynewsnetwork.org/article/165483#sthash.ve8XTYkk.dpuf

The Case for Slavery Reparations Rests on a False Assumpt - See more at: http://historynewsnetwork.org/article/165483#sthash.ve8XTYkk.dpuf

The Case for Slavery Reparations Rests on a False Assumpt - See more at: http://historynewsnetwork.org/article/165483#sthash.ve8XTYkk.dpuf

The Big Evil Bank Stumbles Again

The WSJ reported today (29 March 2017) that Wells Fargo has stumbled again as its CRA (Community Reinvestment Act) rating was cut to "needs improvement." (What is this kindergarten??) In short, it isn't lending enough to minorities according to the government and that means "The Big Evil" will find it more difficult to acquire more banks, open or relocate branches, and make certain types of investments. Institutions like Wells Fargo are not "evil" per se, of course, they just behave as if they were evil when they do not have proper incentives in place. I think regulators ought to audit ALL of their compensation and other incentive programs back to at least 2010, if not 2005, to look for other customers that the bank defrauded for the benefit of some of its employees.

The Poverty of Slavery: Slavery Is Alive, but Unwell

This recently appeared on Palgrave's blog:

Slavery Is Alive, but Unwell 

Robert Wright, author of The Poverty of Slavery: How Unfree Labor Pollutes The Economy, writes about the continued existence of slavery today and its impact on the global economy.

About 46 million people worldwide today are enslaved. In absolute terms, that is more than at any other time in recorded history. In terms of percentage of the total population, though, slavery is less important today than during any previous epoch, raising the hope that it might soon be extirpated once and for all.

That any significant number of people remain enslaved today runs counter to the widely taught but erroneous belief that slavery ended thanks to a wave of Great Emancipations by Britain, the United States, Brazil, and others in the nineteenth century, and the outlawing of domestic slavery by nations throughout the globe over the course of the twentieth century. While slavery did end de jure throughout the world, it never ended de facto anywhere.

In the United States, for example, the Thirteenth Amendment allows for the enslavement of convicts, a loophole that white bigots leveraged in the late nineteenth and early twentieth centuries to enslave large numbers of African-Americans, most convicted of minor crimes like loitering, on plantations and in coal mines and factories. Such practices formed the basis of today’s carceral state. Meanwhile, so-called “white slavery” was perpetrated in most major urban areas throughout the nation and over time morphed into today’s sex trafficking.

Although the term slavery has lost some of its precision over the years due to its misapplication to a wide variety of heinous practices, the 46 million person estimate is legitimate, referring only to people who are physically or psychologically prevented from seeking employment elsewhere. Unlike slaves of yore, which were valuable assets, today’s slaves are cheap and hence disposable. Enslavers regularly work them to death or until they are no longer able to function, then discard them unceremoniously.

Despite its illegality, slavery persists because enslavers find it profitable. Enslaving others entails only a minimal purchase price and the biological minimum needed to keep the enslaved at his or her assigned tasks. It is said to be the third most profitable illicit business in the world today, after drugs and arms dealing, but few enslavers are ever convicted because they are able to buy off law enforcement officials or intimidate witnesses.

Over the last twenty years or so, however, antislavery NGOs and governments have recognized the size of the problem and taken steps to raise public awareness and to strengthen antislavery laws and enforcement. Their efforts are strengthened by the conviction of all but a few fringe groups, like ISIS, that slavery is morally unacceptable in today’s world.

Unfortunately, a bevy of historians has recently broken the 150-year consensus that slavery is also economically bankrupt by arguing that slaves, slavery, and/or the slave trade spurred British and American industrialization. Their works are popular in some circles because they provide the descendants of slaves with a source of pride and fodder for reparations claims.

Ultimately, however, the notion that slavery can be good for the overall economy is deeply flawed because enslaving others creates large negative externalities, or costs borne by society (and not by enslavers). Those externalities are myriad but not easily seen. Where slavery is legal, they include the cost of returning runaways, special slave codes, and slave patrols. Where slavery is illegal, the costs include corruption, environmental degradation, and lives ruined by rape, drugs, disease, and torture.

The negative externalities, or pollution, caused by the enslavement of others pervades every known slave society throughout the globe and throughout history, proving that slavery has never, anywhere, induced economic growth or development. African-Americans in search of economically powerful forbears should look to early West African empires, like Timbuktu, rather than to slave regimes like the U.S. South.

While the inability to accept alternative employment (or not to work at all) is a key indicator of enslavement, a new 20-point freedom scale details the myriad ways in which individual workers suffer loss of freedom. The freedom index helps to differentiate chattel slaves, who generally score 2 or less on the scale, from other forms of bonded or coerced laborers, who typically score 3 to 5 on the scale, from workers, like interns, apprentices, and long-term contract workers, who enjoy more freedom than bound laborers but considerably less freedom than most modern employees, their bosses, or proprietors. The freedom index also explains how NBA players worth millions can equate themselves with slaves.

The index is important because less freedom (more slavery) leads to larger negative externalities, so policymakers interested in increasing economic output should strive to help workers achieve as much freedom as they can, consistent with the available technology set. Technological advancement reduces unfreedom in the workplace by allowing producers to replace labor with capital whenever the latter becomes cheaper than the former, even in its cheapest enslaved form. But those concerned about modern slavery cannot wait for technology to produce viable sexbots or machines that can roll bidis or weave carpets cheaper than enslaved children can. Slavery is simply too morally reprehensible, and too economically costly, to ignore.

Robert E. Wright is the Nef Family Chair of Political Economy at Augustana University and the author of 18 books, including The Poverty of Slavery: How Unfree Labor Pollutes The Economy.

NB: All opinions expressed here are the author’s own and do not represent the views of Palgrave Macmillan.

The Poverty of Slavery

This ground-breaking book adds an economic angle to a traditionally moral argument, demonstrating that slavery has never promoted economic growth or development, neither today nor in the past. 

Find out more

"Wells Fargo Withholds Top-Level Bonuses" by Emily Glazer and Austen Hufford

In today's (3/2/17) Wall Street Journal, Emily Glazer and Austen Hufford describe how the board of directors of Wells Fargo has stripped 8 top execs of bonuses tied to the fake account creation scam. That is certainly a step in the right direction. What the Wells Fargo board and investigative reporters need to look into, though, are the scams that Wells Fargo ran on borrowers who had defaulted on their mortgages during the subprime mortgage fiasco. This included hiding behind  "holder in due course" doctrine though WF (or at least some persons employed by WF) knew the bank was buying tainted paper and colluding with the lawyers of mortgage defaulters to induce their clients to settle deficiency suits when it best suited WF execs. (When anything is collected on debts previously written off as bad the funds go right to the bottom line.) Finding sufficient evidence would take some digging, and will probably require a whistle blower, but the story would be worth a Pulitzer or at least a Peabody.

UPDATE: The WSJ reported today (4/6/17) that Wells Fargo did indeed screw over additional groups of customers, including credit card holders. Reporters who keep pushing will be rewarded! So, too, will regulators. The big evil bank's transactions going back to the subprime crisis -- ALL OF THEM -- need to be scrutinized. If the bank dies in the process, so be it. There are PLENTY OF CREDIT UNIONS that will be happy to hold deposits, etc. safely and ETHICALLY for former WF customers.

UPDATE 2: The WSJ reported today (4/11/17) that the "clawbacks" on executive compensation were being increased at the top level. A 113-page report essentially blames the former CEO for the bank's unethical practices. This is a flawed narrative! WF has been "evil" since at least 2000. They are throwing Stumpf under the bus (as they well should) not for justice but to try to minimize the damage by limiting wrongdoing to the reign of the most recent CEO. The FEDERAL RESERVE and FDIC need to investigate Wells Fargo's activities carefully, all of its activities, going back to Kovacevich if not Hazen.

See Genealogy of American Finance for background!!!!