The True Gold Standard (Second Edition)
In his first term. President Barack Obama has learned the hard way how difficult it is to maintain the country’s confidence. In an interview during that term with the Today Show’s Matt Lauer, the host suggested that he needed to kick some butt to maintain the country’s confidence.
To restore the country’s and the world’s confidence will take some doing – but it might pay to begin with money. “Money is a collective act of the imagination, and it’s a thing which we have invested our credence in, and it works because we do that,” according to John Lanchester, who wrote Whoops! Why Everybody Owes Everybody and No-One Can Pay.
We have ample evidence that the process isn’t working. Time Magazine’s Rana Foroohar has noted: “The fact is, each recovery since 1990 has been weaker, and taken longer, than the one before. According to the McKinsey Global Institute, in all the recessions from World War II to 1990, U.S. employment returned to prerecession levels roughly two quarters after GDP did. In the three recoveries since, though, there have been lengthening lags. At the current rate of job creation, it will take about 33 more months to restore the jobs lost in 2008 and 2009.” In an interview in TIME Magazine last year, former President Jimmy Carter was asked: “How much can a President do to fix the economy?” His response: “The President’s distant third after the Federal Reserve and the Congress – except when we do something like go into Iraq and have an unnecessary war.”
Well, there are things that can be done if the president and Congress want to act – and stop complaining. Not overnight, but they can begin the process that restores order and discipline to the world’s financial system. It is as much in the world’s interest as it is in the interest of the United States.
Back in 1976, Lewis E. Lehrman wrote in Money in the Coming World Order: “United States citizens are, as the creditors of their government and banks, subject to the authority of their duly constituted monetary authority. Whatever United States citizens may think of the national monetary policy, it is nevertheless, the monetary policy of their own legitimate governmental authorities, in whose election they have participated and over whom their collective opinion must have some influence. But the currency area of the dollar incorporates many nations of the world. And it is quite a different matter of political obligation if one is a citizen of another country. As a holder of dollars, a foreigner objects to the debasing of the value of his asset by an extraterritorial monetary authority, the control of which may not be subject to his vote or influence.”
Time for an American commission to restore monetary sanity to the nation...and the world.
The Federal Reserve System's James Narron and David Skeie, career officials with the Federal Reserve System, are two eminent historically erudite figures. Writing in the New York Federal Reserve Bank's online publication, Liberty Street Economics, they recently provided a continuation of their valuable historical "revue," Crisis Chronicles: The Collapse of the...
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On July 6th, Nobel economics laureate and Princeton Professor launched, in the New York Times, one of his occasional polemics, entitled Conservative Delusions About Inflation, against proponents of the gold standard. Krugman Caricature under creative commons license from DonkeyHotey As usual, Prof. Krugman is, conveniently for the position he takes, beyond lopsided...
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An article headline in Saturday’s Wall Street Journalread “Rate Talk Heats Up Within The Fed.” As Journalreporters Jon Hilsenrath and Michael Derby...
Why the Gold Standard?