Monday, May 9, 2016

History: The Year is 1782

I've uploaded year 1782 to the TSP Wiki...

Here are some one liners...

Fundamental Change Begins -- The idea of the monarchy is losing credibility fast. People want change. I talk about the peace negotiations between American and Britain and hope and change.

America's First Central Bank -- Yep. They need something to stop runaway inflation and to control the money supply. This is their solution... for now.

Lighter than Air Flight -- The first hot air balloons.

Fundamental Change Begins

Something fundamental has changed, not only in Great Britain, but throughout Europe. The monarchy, as an institution, is a dying system. Great Britain has lost control of most of North America. A rag-tag militia with nice rifles but no shoes has taken it from them. Parliament has formally suspended operations against America. The American militias have hurt the British badly by losing. That is, draining resources from the British by running away and denying them victories. Examples are Bunker Hill and the Battle of Guilford Court House where the British lost so many troops that they would have been better off running away themselves. Certainly, General Nathanael Greene ran away throughout his fight in North Carolina. He was criticized for his tactics, but he whittled down the British forces. So now peace negotiations are under way, but the British are still trying to win something. While negotiating with Benjamin Franklin, John Jay and John Adams, the British are secretly negotiating peace with France, hoping to play one against the other. When Franklin finds out he makes the American treaty contingent on a negotiated peace between Great Britain and France. (This prevents Britain from splitting up the allies.) [1] [2] [3] [4] [5]
My Take by Alex Shrugged
FYI, France was in big economic trouble. They had financed part of the American Revolution but they weren't getting anything back for it in terms of larger markets. [6] And talk about hypocrisy, in 1782, France put down a democratic revolution in Geneva. The natifs (or natives) of Geneva were taxed so heavily that they rose in revolt for a democratic government. France, and others put down the revolt. The French leadership wanted to ease into government reform. When the French Revolution launched, the government wasn't prepared. King Louis the 16th and Queen Marie Antoinette lost their heads, not because they were terrible leaders, but because they had lost their credibility as monarchs. No matter what they did or said, even if it was good, the people no longer believed them. President Obama promised "Change you can believe in" and the people believed.... for a little while. But eventually the people stop believing the leadership. They stop listening and then they launch. [7] [8]

America's First Central Bank

The United States (plural) have not reached hyperinflation levels yet, but they are getting close. The United States have printed over 225 million dollars (face value) worth of continental bills, Congress has devalued the bill to 2.5% of its face value. The phrase "not worth a continental" becomes very popular this year. Inflation is out of control. Prices doubled in 1776, then doubled again. Now they have gone up 10 times. People are returning to bartering. Debt is piling up with no way to pay it. Last year, Robert Morris, the financier, stepped in to bring order to financial chaos. Morris was the guy who came up with the money to transport Washington and his troops south to Yorktown so that they could win the war, so he is important. He and Alexander Hamilton agree that the United States needs a central bank to control the money supply so Robert Morris establishes the Bank of North America. (No hissing please!) To get it started, 1000 shares at $400 are offered. This represents the first IPO of the United States of America. The bank will be replaced as a central bank by Alexander Hamilton's First Bank of the United States in 1791. [9] [10] [11]
My Take by Alex Shrugged
Throughout US history you will see various financiers taking the role of saving the US economy either with their influence, arranging loans or with their own money after the politicians mess things up. One obvious example is Andrew Mellon who served almost 11 years as Secretary of the Treasury. He was a rich guy before he took the job and he was rich after. He wanted to lower tax rates across the board but especially on the rich. (The tax rate on the rich was over 80% at the time.) When a government makes a tax low enough, it is no longer worth the time or money to avoid paying the tax, so more people pay the tax and thus more money is collected. The flat tax is popular because it is simple and usually reasonable. No one likes paying taxes but if a tax is easy to calculate and reasonable, most people will pay it.

Lighter than Air Flight

The war to take back Gibraltar from Great Britain has spurred an idea in Joseph's mind. What if there was a way to float over the fortifications? He builds a small wooden frame and covers it with a light taffeta cloth (maybe silk). He lights a fire under it and the contraption hits the ceiling. He gets together with his brother and they build an even larger frame outside. It flies (unmanned) over a mile and crashes. Several passersby destroy it. Perhaps they thought it was a demon. Next year they will try it again... with people! [1] [12] [13]
My Take by Alex Shrugged
The brothers demonstrated their "balloon" in front of King Louis the 16th of France and Queen Marie Antoinette. It looked like a work of art as much as a flying machine. They soon took passengers 3,000 feet in the air. Where oh where is the world going? And can you stop it? Should you stop it? You may not like change, but change is always coming, unexpected, and sometimes wondrous.

This Year on Wikipedia

Year 1782, Wikipedia.

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