Welcome to Thoughts in the market. I'm Andrew Sheets, Chief Cross Asset Strategy

for Morgan Stanley. Along with my colleagues bringing a variety of perspectives,

I'll be talking about trends across the global investment landscape and how we put those

ideas together. It's Thursday, July 2nd at 2 p.m. in London. This weekend is the 4th of

July and in honor of the holiday I'm going to discuss Alexander

Hamilton, the debate over federalism, and how these ideas remain relevant well over 200 years later.

Hamilton's remarkable life saw him serve as an officer in the Continental Army and as an aid to George Washington.

After the war, he was one of the loudest and most eloquent proponents of the idea that the 13 states should be formed into a single country.

To forge that union and to help it endure, Hamilton was passionate

about the idea of federalism, the idea that centralizing power, especially economic power,

contained a number of advantages.

I won't do justice to that debate here,

although for further details,

there are some excellent books and one very excellent play

that is now available to stream.

Hamilton saw the centralization of financial power as central to a new government system that could succeed

where previous attempts to unite the former colonies had failed. He lobbied for the new American government

to assume the debts of the states, simultaneously binding them together and

creating a justification that taxation and financial power should be concentrated at the national level.

The value of such a system still reverberates over 230 years later.

When COVID-19 first struck the US, it struck unevenly, and was heavily concentrated in

Hamilton's home state of New York. Imagine if our system had forced New York to bear that entire cost at the moment that it could least support it.

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