Deep within the bowels of CPAC, in a small conference room on the second floor of the Marriott Wardman hotel, dozens of people packed inside to listen to a blue ribbon panel—or perhaps I should say “gold standard” panel, for that was what John Mueller of the Ethics and Public Policy Center, Jeffrey Bell of the American Principles Project, and James Grant—yes, that James Grant, author of Grant’s Interest Rate Observer and Ron Paul’s pick to head the Federal Reserve—were on hand to talk about and explain: a return to the gold standard. And yes, Grant—and many in the crowd—were wearing bowties.
Although I do wonder if the real reason people showed up were because of the Bavarian pretzels they were offering.
I have to admit, I came into the panel with a major question. I am totally for the abolition of fiat currency, the abolition of the Federal Reserve, and the restoration of a sound money policy. 2011 dollars are worth about 19 cents in 1971 dollars, the year when Nixon closed the gold window and took the country off the gold standard. It is, I argue, the necessary step before we can even look at getting rid of minimum wage, unemployment compensation, things that libertarians would want to remove, but we can’t because the money people are using isn’t worth anything. But is the gold standard really, well, the “gold standard” of monetary reform? Would going back to the sixties necessarily bring back prosperity? Were there any other alternatives?
James Grant immediately launched into the common objection of fiat supporters (“fiatists”?) who argue that the gold standard is anachronistic and not well suited for the complex 21st century. He argued it was especially suited for the 21st century, because this is the century of what he labels “collaborative social networks.” Oh yeah, we all thought, Friendster. I dig you. But that wasn’t what he was talking about at all; he said such things were really markets, and that the gold standard was a market where individuals and businesses would collaboratively determine the rate through normal market processes.
Yes, that’s right: Grant argued that the gold standard is the Facebook of currency. Or maybe the Twitter. Or Google+. I’m not sure which one puts the gold standard in the most glowing light. (What, you didn’t think I was a real journalist without biases, did you?)