Tim Geithner’s book Stress Test is very well-written, and I’ll have a review out in the next week or so. I couldn’t resist putting up this section, which is Geithner’s view on America’s first Treasury Secretary, Alexander Hamilton.



We were going to deploy federal resources in ways Hamilton never imagined, but given his advocacy for executive power and a strong financial system, I had to believe he would have approved. It was Hamilton who had insisted on assuming the debts of the states and paying the new nation’s creditors at face value to establish the U.S. government’s reputation as a solid credit risk, even though haircutting foreigners and speculators who had bought Revolutionary War debt for pennies on the dollar would have been much better politics. He was America’s original Mr. Bailout. As the inscription on his statue said: “He touched the dead corpse of the public credit and it sprang upon its feet.

Geithner’s view is essentially that the Constitution was set up primarily to benefit creditors - speculators and all - and ensure a robust public credit. It’s the liberal originalists who think otherwise. This is also radical historian William Hogeland’s thesis in Founding Finance: How Debt, Speculation, Foreclosures, Protests, and Crackdowns Made Us a Nation.