Bullying the Thrifty

Years ago, I read a children's book by Judy Blume, called Blubber. It was a book about bullying. And I was disappointed in it, because it did not vindicate the obese little girl who was bullied. It merely showed the people doing the bullying that what they did was not "nice".

The copy of the book that I read had this cover.

My disappointment need not reflect on the value of the book to other people. I was just hoping for a different book, one that looked at things from the point of view of the person being bullied, who had some secret virtue that no one was aware of, and I wanted the turning point to be when that virtue was revealed. But Judy Blume never showed how the bullied girl felt about anything. Instead, she described in detail the revulsion that even "nice" girls in the class had for not only the person of the obese girl, but also her character: she was phlegmatic, she had no sense of humor about her problems and she did not stand up for herself, making her an easy target. I learned a lot about normal people and how they think when reading this book, but I was disappointed that there was no turn-around, no empathy and no appreciation of a different point of view. In the end, the nice girls decided not to bully, because they did not like how they felt about themselves when they were being vindictive, but not because they had learned to admire and respect the victim of their bullying. Deep down inside, the main character still felt the victim deserved to be bullied, but she now felt it was beneath her to engage in bullying. To my way of thinking, this book represents the "Kindness Movement."

A person who has been bullied isn't looking for kindness. What is needed are honest, smart  people --  people who are perceptive enough to see what it is that each of us has to offer. Victims don't want charity. They crave fairness. Bending over backwards to be kind, ordinary people miss the virtue behind the presumed sin.

In Our Lady of Kaifeng: Courtyard of the Happy Way, Bertha Higginbotham is a character who resembles the victim in Blubber.  She comes into the camp morbidly obese, and even after losing a lot of weight on the Weihsien diet, she is still quite heavy, when everyone else is emaciated. Jealous of her good health, people accuse her of stealing sugar, on the mere circumstantial evidence of her weight. That would be like accusing your co-worker who earns the exact same salary as you do of theft, merely based on the fact that he has savings, while you do not. People do this every day, and nobody thinks anything of it. Who will stand up for the thrifty? In my book, it was Father Horvath.

When politicians suggest that we tax the rich, they are not going after corrupt people who have stolen from others. They advocate taxing  anyone with savings, and they rely on the hatred of the masses for the financial Bertha Higginbothams of this world, who may seem unattractive, but who have hidden virtues. 

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When the Banks Renege -- The Panic of 1819

Jean Laffite always paid for his purchases in specie. He paid his debts in silver and gold. When he wanted to make change, he could cut up a coin or a bar into smaller pieces, because the value of the coin was in the metal it was made of, not the printing that was on it. Try making change by cutting up a dollar bill today. Not only will the little pieces not be worth a fraction of the whole, but also it's illegal to do so!

During the War of 1812, some merchants in New Orleans tried to blame the Laffites and their establishment at Barataria for a shortage of specie. It is typical of people who themselves deal in bank notes without cover that they try to blame others who are more fiscally responsible for their own problems.

The United States was not on a solid financial footing during the War of 1812, but after the war, things became much worse. In 1816 the Second Bank of the United States was established. And in 1819, we had our first major Panic, aptly named the Panic of 1819.

What were the causes of the Panic of 1819? Those in the know will name a few: a reduction in the price of staple goods like cotton due to a resurgence of production in Europe which hurt growers in  the U.S., the printing of bank notes without cover by various banks, and the eventual  tightening of the money supply when the United States needed to withdraw two million in specie from the Second Bank of the United States to make payments in October of 1818 on its notes for the Louisiana Purchase, promissory notes made out to France but now owned by an English bank.  After this withdrawal, there was not enough specie to cover the bank's obligations.

The problem for ordinary people was that while banks that were in debt were not forced to pay their creditors in specie, and the Bank of the United States, though a supposedly private entity, was exempt from the laws of the states and could not be foreclosed on, ordinary people still had to pay their own debts, or suffer the consequences.

When a tighter fiscal policy was enforced at Second Bank of the United States, the saying went that the bank was saved, but the people were ruined.

Now, many populist agitators see this as an issue between the "wicked rich" and the "victimized poor", but this way of conceptualizing the problem hides the real issue: that not all poor people are treated the same. If we go by net worth alone, the Second Bank of the United States and all the other reneging smaller banks that relied on it, were actually poorer than an ordinary person who had a few coins in his pocket, because they had a negative net worth. The banks, including the very biggest one,  should by rights have been allowed to collapse and their corpses fed to their creditors.

President Monroe is thought to have been a fiscally conservative president, because he did not pass relief for the "poor". But how fiscally conservative is it to allow a bank to reneg on its obligation to depositors? The very poorest of the poor were the banks themselves. They should have been allowed to fail.

Would the United States not have fared better under pirates who dealt exclusively in silver and gold and made change in bits and pieces?

the value of money used to be in the metal and people made change by cutting it