“Abraham Mordecai-who, believing that the Indians were descended from the Ten Lost Tribes of Israel. threw off the “yoke” of Jewish law, went native, and married an Indian girl- was actually the founding father of Montgomery, Alabama, cradle city of the Southern Confederacy.”

from Why are Jews Liberals by Norman Podhoretz

“Abraham (Abram Mordecai) settled in central Alabama by 1785 and established the state’s first cotton gin near Montgomery”. Jewish Virtual Library

“With the purging of Alabama’s native groups, more and more white settlers were struck with “Alabama Fever” and moved to Montgomery to take advantage of its strategic location on the Alabama River. By 1846, it was a thriving community and Mordecai’s original trading post became Alabama’s state capitol.”

“In 1847, Albert James Pickett a journalist from Montgomery, discovered Mordecai in a remote mountain cabin near Dudleyville. Mordecai in his old age had become increasingly eccentric, having built his own coffin on the floor next to his bed. Relishing the company of another human being, he told Pickett all about his life as a trader living among the strange, lost tribe of Israel. After that final interview, Mordecai died three years later at 99 years-old.He was buried in the coffin he built himself. The Montgomery Evening News proposed the construction of a monument to the Little Chief, who they deemed “the cradle rocker of Montgomery’s infancy.” The Daughters of the American Revolution erected a small plaque in Dudleyville that stands to this day.”

From The Goldring/Woldenberg Institute of Southern Jewish Life

from Paul Johnson

“The study of history is a powerful antidote to contemporary arrogance.  It is humbling to discover how many of our glib assumptions, which seem to us novel and plausible, have been tested before, not once but many times and in innumerable guises; and discovered to be, at great human costs, wholly false.”

In A Short History of Financial Euphoria(1993), J. K. Galbraith takes a brief look at financial bubbles and draws conclusion about the similarities among them. The most remarkable of the early manias was not in stocks, but in tulip bulbs. The value of mere tulips grew to the modern equivalent of $25,000 to as much as $50,000 during the Tulip Mania that swept the Netherlands in the 1630s.

Read full article at American Thinker

Thomas Paine’s ” Common Sense” was credited with turning colonial independence from a debate into a movement. His widely published essay is considered an important document toward the founding of our nation.

Less noted is Paine’s “The Age of Reason” written in 1794. This piece was a full frontal assault on organized religion including Christianity. Paine was a deist- one who believes in a supreme or divine creator, but uninvolved in his ongoing creation or interested in the daily trysts of his believers.  The belief in Christ, to Paine, was no different than a belief in a Sun God.

Just as “Common Sense” garnered Paine many admirers, “The Age of Reason” incited intense hatred.

For many who insist that our country was founded on religious principles, Paine is a reminder of our secular tradition as well.  Even today he challenges our tolerance for minority beliefs.

Obama has posed this question and seems to think we can.  William Dudley the new president of the New York Federal Reserve thinks they can and should act to identify and prevent asset- price bubbles.  I remain very skeptical.

The Federal Reserve was formed in1913 to bring stability to the financial system.  Yet in its first test, responding to the Great Depression, its actions made the depression last longer than any previous recession.  The Fed had problems controlling inflation from the 1960’s until Reagan and Paul Volcker painfully wrestled it under control in the early 1980s.

Should all bubbles be contained?  Is gold in a bubble now? If it is should we be concerned? Or should we just let gold prices take its course as it eventually did in the 1980’s?  Bubbles seem to be clear only in hindsight.

Is it possible for the Fed to be truly independent of politics? I doubt it.  The recent housing bubble was largely caused by political pressure to make  housing more affordable.  President Clinton thought this was a more progressive approach than just building more government housing projects.  While this idea had considerable merit the devil is in the details and the execution of the laudable goal was a great driver of the housing bubbles.

Fannie Mae was driven by political goals and Congress fought efforts to bring it under control, almost along distinct party lines.

We had bubbles before the Fed and we have had bubbles after its formation. They seem to be more drastic since the Fed was created.  The market forces may have popped bubbles quicker without the intrusion of political objectives into the mix.

But can the Fed even foresee and manage bubbles? If they can why haven’t they before?  Greenspan noted that growth in wealth creation and savings in foreign countries had a great influence in the last bubble and was largely outside the control of the Fed.

Governments try to fight the last battle, leaving them wholly unprepared for the next one.  It is like trying to play a board game when the rules and the board surface constantly changing. That is just the nature of the market.  Those who think this beast can be tamed assume that all of the unknowns are known when the unknown unknowns are the real problems. Government always thinks they can analyze the last problem well enough to prevent the next one and they are rarely correct.

Efforts to contain bubbles may create such stagnation that the true cost of such policies will be hidden.  While we desire stability do we really want it at the expense of economic growth?   If the government is so willing to engage in economically destructive behavior such as massive debts and intrusion into markets how can we truly expect them bring such discipline to our economy to ‘manage’ bubbles, especially given their role in creating them?

“Nobody wants sound money.”  It requires a discipline that our leaders clearly have not shown before, and this administration certainly doesn’t seem to have any. Trying to segregate politics from the management of credit and the money supply may be another utopian dream that costs far more than anyone is willing to pay.