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Amerinomics, Part Three: The Golden Era of the American System

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During the Civil War, Abraham Lincoln had far more than military concerns to deal with. With the South, a crop producer second to none, forming a pseudo-country of its own and the West mostly inaccessible due to rebels controlling much of the Mississippi River, America’s economy was left in shreds. Henry Charles Carey, serving as Lincoln’s chief economic advisor, believed that this allowed for a chance unlike any other to totally restore the American system. With both Southern slave-intensive free traders and libertine Western pioneers out of the picture, the mercantile North was left to run the show.

Run the show it did. Tariffs were tripled, railroads built, and the Legal Tender Act passed. The latter was especially important; it allowed the Treasury to print greenback currency not exchangeable in precious metals. Essentially, Lincoln’s leadership managed to bring the country back to a time of economic independence, innovation, and security.

Following Lincoln’s assassination, which roughly coincided with the South’s defeat, other presidents would continue in his tradition. Reconstruction, a complex political policy that allowed Northern appointees to run Southern public offices and institutions, guaranteed the North total control over the American system for over a decade.

Even after Reconstruction ended, the South had grown, begrudgingly, to largely accept the American school. The West, locked in a series of wars pitting settlers against native inhabitants, understandably had greater priorities. As the years passed, the nation’s economy continued to grow stronger; more factories were built, more products devised, and both blue and white collar workers enjoyed higher incomes. At times, so few things were wrong with America’s domestic market that pundits actually searched for things to squabble over. By the 19th century’s closing decades, the United States had become the world’s foremost industrial power. As the year 1900 approached, it seemed as if an unparalleled era of prosperity was at hand.

Even before then, though, the seeds for the American system’s destruction had been sown. The fellow who planted them was Grover Cleveland, who served as president for two nonconsecutive terms in the 1880s and 1890s. A staunch believer in economic noninterventionism, he radically cut tariff rates and vigorously promoted internationalist trade. By the end of his second term, the public was panicked over the future of the nation’s economy and subsequently elected William McKinley, an outspoken tariff advocate, to the presidency. McKinley managed to reinvigorate not only the market, but also the dollar, with his emphasis on backing the latter with gold. The good times were rolling once again, though these were not to last.

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About Joseph F. Cotto

  • Kyle Hunter

    You do know that the North won the Civil War and that Lincoln was a republican right?

    Other than that, though I read all five paragraphs of this twice, the purpose of this eludes me, unless you want your readers to gasp, oooo oooo what happens next?

    How soon and what right-wing financial propoganda will he write next in this strangely boring comic book serial?

  • Glenn Contrarian

    Joseph –

    So where are you going with this? Are you now supporting a return to the gold standard and the lack of regulation that led to the robber barons and monopolies that ran America’s business and industry sectors at the time that you said there were so few things wrong?

    And do you think, then, that Teddy Roosevelt should not have become a ‘trust-buster’?

  • Igor

    What nonsense.

    All of the achievements of the late 19th century were financed by the US government and the American taxpayer. But the Robber Barons (as they were properly called) skimmed the profits off the top, built their fabulous vanity mansions and estates, and left the operating companies as empty shells, i.e., broke.

    All the great fortunes that the Robber Barons skimmed off the tops of railroads, canals, pan american trade, etc., were at the expense of American citizens who got stuck with lifetimes of hard dangerous work and NO permanent holdings, not even a retirement or disability.

    In fact, American workers, the mass of American citizens, were so greatly exploited for the enrichment of a few, that Karl Marx thought that the Communist revolution would occur in the USA. As did many historians and politicians in America.

  • Glenn Contrarian

    Joseph’s article is a shining example of what’s wrong with the conservative mindset: that we should go back to how it was in the “good old days”.

    But they don’t seem to realize that the “good old days” weren’t so good.