Since the first case of covid-19 was reported in the US, Americans have had to face a new cause of illness and death. Two years into the experience, society remains divided in its willingness to combat the virus, protect itself, and limit the harms that this pernicious, sometimes mortal contagion wreaks. Covid is just dangerous enough to interfere with ordinary social pleasures, disrupt institutional regimens, and cramp habits of congregation outside. Continue reading
Tag Archives: risk-taking
Was American Greatness Built on Fiscal Folly?
Is American greatness based on extravagant decisions that make no economic sense? I’m pretty sure the answer is yes.
Our history is littered with “go-for-broke” projects that were hailed as sure-fire disasters at the time. They would never have had a chance if our ancestors had had to defend themselves against the hand-wringers and economic rationalists who control American decision-making today.
Here is a short list of things that would never have happened because they entailed excessive risk, uncertain returns, irrevocable loss, or extravagant outlays. In some cases, the day of exoneration for these decisions didn’t arrive for decades. In the meantime, the country and its leaders endured ridicule as well as some terrifying liabilities.
1. The Revolution. It should have been a doomed undertaking. The rebellion was impulsive and deepened into a pitched struggle that lasted eight years. During that time, the colonies held it together with a more or less powerless committee that they tried to dignify with the name of the Continental Congress. The war was fueled largely by reckless borrowing and the issuing of funny money. The country organized under the Constitution largely because the new structure promised impecunious states debt relief. Burdened from the outset with staggering debts, we became the US because there was no other way.
2. The Louisiana Purchase. Jefferson’s famous 1803 purchase was another patent error we wouldn’t think of committing today. True, he acquired all that land west of the Mississippi, out of which 14 or 15 perfectly good states were made, —but he agreed to pay France an amount of money that was two times our entire federal budget at that time. How could that be wise?
3. The founding of Washington, DC. Another ghastly boo-boo. Instead of putting the capital near one of the existing states or cities, our frivolous forefathers insisted on mapping out a whole new city, and on a ridiculously grandiose scale, too. Ignoring the fiscal realities, they threw away dollar after dollar building up an unduly magnificent city—it was all too European. Yet, lo and behold, the iconic city they built is a global symbol, anchoring a metropolitan region of some 5 million people that is one of the most dynamic in the US today.
4. Seward’s Folly. The Alaskan Purchase. Another instance of classic fiscal adventurism. Another expenditure the US didn’t need, especially not in 1867, when the government was laden with debt from the Civil War. Critics argued that Alaska was inconvenient, and unnecessary; its only asset was a population of fur-bearing animals, whose value was declining. That was before the gold was discovered, or the oil. Purchased for 7.2 million dollars, Alaska today has a $49-billion GDP.
5. Ending slavery. This, surely, was the most economically reckless action in American history. For in putting an end to slavery, the US deprived one class of white Americans of millions of dollars of “property” and put an end to a convenient labor system they were accustomed to. The gradual recognition that the slaves in our midst had a moral and political claim to be treated differently—that, in fact, Americans of all races are entitled to full civil and political equality—is one of the costliest convictions at which we’ve ever arrived. Yet like many of our other decisions that “made no sense,” this one was essential to our national integrity. And it highlights, in a way that the other items on my list do not, why economic rationality alone has never been, and should never be, the transcendent value in a republic like ours.
So, to my contemporaries I say—yes, cut away the waste and the unnecessary—but never disavow that go-for-broke mentality. It’s part of the folly that made us great.
Image: The U.S. Capitol in 1830s Washington, D.C.
from this source.
For a photograph of the Capitol from this period, click here.