Flunking the Fed

   Watch for the current president to follow the example of his hero Andrew Jackson and try to shut down the nation's central bank.
   In addition to closing the Second Bank of the United States, Jackson deported the Cherokee Nation from the only home they ever knew, in Georgia, sending them to follow a Trail of Tears to Oklahoma. In doing so, he ignored a Supreme Court order against it.
   Exactly 184 years ago, on September 10, 1833, President Jackson withdrew all federal funds from the Second Bank of the United States, which had been formed in 1816 as a place to stash federal funds. It replaced a national bank set up by George Washington and Alexander Hamilton in 1791, but its charter expired in 1811.
   Jackson's excuse for shutting down the Second Bank was that it was biased toward northern states because its board of directors had substantial ties to industry and manufacturing, and ignored the needs of agricultural and frontier regions. Jackson had already vetoed a congressional effort to grant a new charter for the bank.
   Earlier, the people of the Cherokee Nation challenged a move by the government of Georgia that refused to recognize their autonomy and threatened to seize their land, according to a report on the web site ushistory.org. The Cherokee won a ruling by the Supreme Court, written by Chief Justice John Marshall, that the state of Georgia had no jurisdiction over the tribe and no claim to their lands.
   Georgia, however, ignored the decision and Jackson refused to enforce it, saying, "Mr. Marshall has made his decision. Now let him enforce it."
   Soon thereafter, Jackson authorized federal troops to round up the Cherokee as well as other Native Americans and deport them to Oklahoma. Some 20,000 were driven westward on the Trail of Tears, and nearly one-fourth of them died along the way.
   Jacksonian followers were opposed to control of the nation's economy by financial elites, and fought to improve conditions for others. This concern for others, however, did not include Native Americans or African American slaves.

   Much of this will sound familiar to those who follow the actions of the current president of the United States, and while he may talk much about preserving conditions for ordinary Americans, this does not include those in minority groups and children brought here by parents who were not legal entrants, nor does that sympathy extend to newcomers in general.
   Meanwhile, lost to the headlines over storm damage and the DACA controversy, the president is quietly moving to disable the Federal Reserve or at least replace the members of its Board of Governors with acolytes of his own free-market, trickle-down economic attitudes.
  Economists have long opposed any suggestion that the Fed be limited in its discretion in manipulating the money supply as a way of preventing wild swings in the nation's economy, much less that the central bank be abolished.
   From the time the Second Bank of the United States was killed off by Andrew Jackson until the Federal Reserve was formed in 1913, the nation was periodically paralyzed by uncontrolled spurts in economic growth, quickly followed by sudden plunges into depression.
   Since then, there have certainly been other swings in the nation's economic health, including the Great Depression of the 1930s and the Great Recession of more recent years. But the prime goal of the Fed is to try to even out this cycle of alternating growth and slowdown to minimize the harm to Americans of every wealth segment.
   The Fed may not have succeeded, but conditions may well have been far worse without the counterbalancing work of the central bank. In addition, it serves as a check on potential extremes by the government. Ideally, the two can work together to enable an easier supply of money when needed and to help finance spending by government as ways to help an economy stabilize its growth curve.
   But when government sets out to disable or destroy the central bank's independence, thus creating more wealth-building opportunities for the few at the expense of the many, then the entire nation is at risk.