Members of the Ferguson Wellman wealth management and investment teams weigh in on how 2026 economic themes have evolved from the founding days of the United States.
What Adam Smith Would Say About AI
June 12, 2026
by Jason Norris, CFA
Director
Equity Research and Portfolio Management
In 1776, Scottish philosopher and economist Adam Smith published The Wealth of Nations, permanently changing how the world understood money, trade and human potential. Before Smith, global powers believed wealth meant hoarding gold. Smith turned that idea on its head, proving that a nation’s true wealth flows directly from the productivity of its labor. To prove his point, he famously shared an example of a pin factory, showing how breaking a complex task into specialized steps allowed a small team to manufacture thousands of pins a day instead of just one.
His radical ideas crossed the Atlantic and reshaped history. Adam Smith was a profoundly influential economic authority during the formation of the United States, shaping the debates that built America's financial and political infrastructure. While The Wealth of Nations was published in 1776, the exact same year as the Declaration of Independence, it took a few years to cross the Atlantic. It the 1780s and 1790s, however, it had become widely read by the Founding Fathers, who utilized Smith's ideas to support their competing visions for the new republic. Thomas Jefferson praised it as the best book in existence, while Alexander Hamilton used it as a blueprint to design the U.S. financial system.
If Smith were here today to witness the rise of AI, we imagine he would not see an economic threat, but rather the ultimate, hyper-evolved tool for cognitive specialization. Just as mechanical looms facilitated manual labor in 1776, AI automates routine mental tasks today, allowing humans to focus on higher-level strategy, creative innovation and complex decision-making.
Far from fearing a jobless future, Smith might argue that AI would lower operational costs, unlock unprecedented wealth and catalyze entirely new industries. History shows that whenever technology makes a service cheaper, society finds new, creative ways to expand. Today, true to his core principles, Smith may simply issue one timeless free-market warning to today's leaders: keep this powerful technology open, competitive and free from monopolistic control.
Reflecting on the Federal Reserve
June 18, 2026
by Jake Gradwohl
Senior Equity Trader
It is easy to forget that, for over half of the nation's history, there was no Federal Reserve at all. For nearly 140 years, banks issued their own currency, reserves were scattered throughout the financial system and periods of economic expansion were often punctuated by banking panics and financial crises. When depositors lost confidence, there was no central institution capable of providing liquidity to the banking system or acting as a lender of last resort. The Panic of 1907, which featured widespread bank runs and a sharp decline in equity prices, proved especially disruptive and ultimately convinced policymakers that a more resilient financial framework was needed.
The Federal Reserve was created in 1913 when President Woodrow Wilson signed the Federal Reserve Act into law. Its original purpose was to address the weaknesses described above and provide greater stability for the nation's financial system. Over time, its responsibilities expanded beyond financial stability to include managing monetary policy, supervising banks, and helping promote maximum employment and stable prices.
The Federal Reserve Act made the institution accountable to Congress while also granting it a degree of independence from day-to-day political pressures. Members of the Board of Governors serve staggered 14-year terms, and monetary policy decisions cannot be directly overturned by either the president or Congress. That independence remains one of the defining features of the Federal Reserve and reflects a broader principle embedded in the American system of government: the belief that strong institutions should be able to serve the country's long-term interests, even amid changing political and economic conditions.
Today, it is difficult to imagine the American economy functioning without the Federal Reserve. More than a century after its creation, the Fed continues to evolve, yet its ability to make decisions independently remains central to the stability and credibility of the U.S. financial system.
AI and Alexander Hamilton
June 26, 2026
by Alex Harding, CFA
Senior Vice President
Equity Research and Portfolio Management
The capital currently being allocated to artificial intelligence infrastructure shares an interesting parallel with Alexander Hamilton’s 1791 Report on the Subject of Manufactures.
Following the Revolutionary War, the United States remained heavily dependent on imported goods. Hamilton argued that achieving economic independence required a focused financial commitment to domestic manufacturing. He recognized that the nation would need to take on substantial upfront costs to establish essential mills, forges and supply chains. To Hamilton, these weren't just steep financial burdens; they were the necessary groundwork required to build a self-sufficient economy.
Today’s digital landscape reflects a similar dynamic. Major tech companies are absorbing near-term costs to secure long-term technological positioning. Specifically, hyperscalers like Amazon, Alphabet, Microsoft and Meta plan to deploy roughly $640 billion in capital expenditures this year to build out their capabilities. Just as Hamilton encouraged strategic investments to overcome the young nation's industrial bottlenecks, today’s leading technology executives are allocating significant capital to building the foundation of the AI economy.
Whether it is 18th-century ironworks or 2026 data networks, the underlying lesson is the same: shifting to a new economic era requires substantial and structural capital investment.
What 250 Years of Taxes Can Teach Us About Agency
July 2, 2026
Samantha Pahlow, CTFA, AWMA
Wealth Management Chair
Executive Vice President
Every Fourth of July, Americans tell themselves a familiar story: Our country was born in a tax revolt. The Boston Tea Party, “no taxation without representation,” and patriots dumping crates into the harbor, all add up to a tidy origin story in which our forebears rose up because they were taxed too much.
The truth is more interesting and useful for anyone thinking carefully about money today.
The Colonists Weren’t Actually Overtaxed
Here is the fact that surprises almost everyone. On the eve of the Revolution, American colonists were lightly taxed compared with people in Great Britain. According to the National Bureau of Economic Research, historians estimate that the average person in Great Britain paid roughly 26 shillings a year in taxes. In certain parts of Colonial America, the comparable figure was closer to one shilling.
So the Revolution was not, at its heart, a protest against a crushing tax bill. The grievance was largely about consent. Colonists objected to being taxed by a Parliament in which they had no direct representation, and to the precedent it set: the concern that a body willing to tax them without their say would not stop on its own.
“No taxation without representation” was not primarily an argument about the size of the tax. It was an argument about who decides.
A Completely Different Machine
If a colonist from 1776 could see a modern tax return, almost none of it would make sense. In 1776 there were no income taxes, no corporate taxes and no payroll taxes. The British government relied heavily on customs duties and excise taxes, while colonial governments also used local taxes such as property and poll taxes (which were abolished in 1964).
In the decades after independence, tariffs supplied the overwhelming share of U.S. federal revenue — roughly 90% in the early republic. In fiscal year 2025, even after recent tariff increases, customs duties accounted for about 3.7% of today’s total federal receipts.
The modern federal income tax didn’t take shape until after the Sixteenth Amendment was ratified in 1913. Much of the federal tax architecture most of us organize our financial lives around, from withholding to capital gains to the estate tax, is relatively young in historical terms. It’s a useful reminder that the tax code is not a law of nature. It is a human-made system, rewritten again and again, and it will likely continue to change in our lifetimes.
What Endures
While the specifics have changed beyond recognition, the founding insight has aged remarkably well. What matters most about taxes is not just what you pay, but whether you have a voice in the process.
That is a meaningful insight to bring to your own financial life. You cannot redraft the tax code. But within your own plan, you may have more agency than you realize. Tax-aware investing, thoughtful asset location, charitable strategies, Roth conversions, the timing of gains and losses, and estate and gifting decisions are not a literal stand-in for a seat in the legislature. They do, however, represent a proactive approach to how your money is treated.
They are the difference between simply reacting to a tax bill and making informed decisions that may help manage tax exposure over time.
That means having a plan, along with partners who can help you understand it, question it and shape it deliberately.
That, more than any fireworks display, feels like the right way to honor where we started.
A 250-Year Timeline of Tariffs
July 3, 2026
by Peter Jones, CFA
Executive Vice President
Equity Research and Portfolio Management
As we look over the horizon, 2026 will not just be a year of projected AI-driven economic growth—it will also mark the USA's 250th anniversary. While seemingly on the back burner compared to 2025, tariff policy remains a persistent media topic and concern for investors. While tariffs are elevated compared to any other period in the modern era, a look back to our nation's founding illustrates that tariffs were once much higher, as they were the primary source of government revenue.
When the Constitution took effect in 1789, the federal government faced an immediate challenge: establishing a stable financial foundation for a young nation burdened by Revolutionary War debt. One of the first major acts passed by Congress was the Tariff Act of 1789, followed by legislation creating a national customs system to collect duties at America's ports. As the nation's first Secretary of the Treasury, Alexander Hamilton was responsible for the repayment of debts related to the Revolutionary War. To do so, he built the federal government's revenue system largely around customs duties, while also promoting policies designed to strengthen public credit and encourage domestic economic development.
The average tariff rates saw a dramatic increase from 20% to 55% between 1790 and 1860, before declining again. This period is characterized by a protective movement that began to take shape after the War of 1812, as the U.S. sought to bolster its manufacturing sector against foreign competition.
Today's tariffs serve a different purpose. Customs duties now account for only a small share of federal revenue, but trade policy has once again become an important economic tool. Policymakers increasingly use tariffs to encourage domestic investment, strengthen critical supply chains and address national security concerns in industries ranging from semiconductors to advanced manufacturing. Although economists continue to debate their long-term costs and benefits, tariffs have reemerged as a central feature of discussions surrounding globalization and industrial policy.
Two hundred and fifty years after America's founding, the role of tariffs has evolved alongside the American economy itself. What began primarily as a practical way to finance a new government has become a strategic policy instrument in a far more complex global economy. Yet one lesson has endured through the centuries: economic policy is often shaped not only by the challenges of the moment, but by the long-term objective of building a more resilient and prosperous nation.
Disclosures
The views expressed represent the opinion of Ferguson Wellman. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Statements of future expectations, estimates, projections and other forward-looking statements are based on available information and Ferguson Wellman’s views as of the time of these statements. Past performance may not be indicative of future results. Ferguson Wellman, Octavia Group and West Bearing do not provide tax, legal, insurance or medical advice. This material has been prepared for general educational purposes only and not as a substitute for qualified counsel who can determine how this information applies to you. We believe the information provided is from reliable sources but should not be assumed accurate or complete.
Please see additional disclosures.