The American System

I am beginning this blog because over the past years, through both the Bush and Obama Administrations, there has been an increasing and shocking disregard for principal in American politics. Rules have been broken, norms have been disregarded, and popular support has been blithely ignored.

For those of you who are curious about the title of this blog, it refers back to the "American System" pioneered by Henry Clay in the early 1800's. It was arguably the most successful and logical domestic policy ever pursued by the United States government; and it is largely to thank for the rapid expansion of the American economy for the century following its initiation. The American System called for a three pronged approach to the American economy:

1. First, it called for the stablishment of a strong central bank to encourage economic stability and provide for a depository for federal surplus funds. The legitimacy of the central bank and its effectiveness have been debated since the times of Andrew Jackson, but overall, the central bank as established by the pre-20th century American government was quite an effective and balancing force in American finance, albeit it was structured quite differently from how it is now.
2. Second, it called for the institution of protective tarriffs for American manufacturing. These tarriffs, while cruelly distorting prices, helped nurture American manufacturing in its early years. This manufacturing, with its seedling firmly planted in the soil of protective tarriffs, blossomed years later and made America the strongest industrial power on the planet.
3. Finally, it called for federally funded infrastructure (i.e. roads, canals, bridges). This infrastructure was intended to unite the country politically, make the country more efficient economically, and provide for more streamline settlement of the west. In respect to all these issues, it succeeded to a degree.

Today, the American System has all but vanished. The central bank no longer serves as a depository for federal funds, but a lender, one that makes substantial profit off of an indebted America. It also is so unregulated and secretive as to ensure almost no genuine justice in the economy. The protective tarriffs have been all but abandoned in favor of free trade, a wonderful institution that has allowed American manufacturing to virtually tumble by double digit percentages in the last few decades. Finally, infrastructure is decaying rapidly for want of funds which would ideally have come from protective tarriffs.

Ultimately, in my first post I would like to make it clear that I will be examining the current state of American affairs in a historical context. It is only in a historical context that we can see what America has gotten right and how we can do it again.

Thank you for reading.