The Link Between Obama and John Law
by Doug French by Doug French
Obama’s 100th day is upon us and the new president is ramping up an expansion of government that will place him alongside some of the most notorious dictators in history. CNN’s senior political analyst Bill Schneider may believe Obama’s personal qualities make him "the superpresident," but first and foremost, Obama with his $3.5 trillion budget sees himself as the new FDR, armed with a new New Deal.
But the New Deal wasn’t new when FDR did it. The charismatic Roosevelt was more than 200 years behind John Law’s Mississippi Bubble, described as "the first New Deal of the capitalist order," by John T. Flynn in his amazing book Men of Wealth.
In a chapter devoted to the money magician, Flynn cleverly calls Law the "evangelist of abundance." And conditions in France could not have been riper for Law’s fiscal chicanery in 1715. France was completely ruined by Louis XIV, a ruler whom history has been much too kind to, according to Flynn. He ravaged the country he ruled, while being a "shallow, egotistical, pretentious coxcomb."
Louis spent vast millions on his palaces and engaged poets and writers to write of his virtues, long before the days of CNN. As Flynn explains, industry had not come to France, thus the king stole his wealth from small farmers and city-dwelling artisans through oppressive taxation.
Those who managed to amass wealth in France did so by knowing "how to tap this stream of public money on its way to the government." There were no entrepreneurial fortunes being made, only parasitic ones.
While the typical French family lived as paupers, going barefoot and sleeping on straw, there were vast fortunes made by those granted government monopolies. Louis died in the fall of 1715 with his country hopelessly bankrupt. The treasury was empty and the army unpaid. It was proposed that the nation formally declare bankruptcy.
Doug French [send him mail] is executive vice president of the Ludwig von Mises Institute and associate editor for Liberty Watch Magazine. He is the author of Early Speculative Bubbles & Increases in the Money Supply. He received the Murray N. Rothbard Award from the Center for Libertarian Studies. See his tribute to Murray Rothbard.