Washington (CNN Business)The United States abandoned the gold standard in 1971, and today the majority of economists in America believe reviving it would be disastrous for the US economy.
Yet that isn’t stopping President Donald Trump from naming a longtime proponent of returning to the gold standard, conservative scholar Judy Shelton, as his latest pick for a seat on the Federal Reserve Board.
Both of Trump’s most recent previous would-be nominees, conservative analyst Stephen Moore and businessman Herman Cain, endorsed returning to the gold standard. But Shelton is far more identified with her advocacy for the idea, which is based on the belief that the price of gold is stable and would make the dollar less susceptible to inflation or other volatility.
“It sounds kind of persuasive if you haven’t studied economics, but it’s really completely counter-factual and for good reason,” said Darrell Duffie, a finance professor at Stanford University. “Gold is an incredibly volatile asset relative to the US dollar as we know it today. It’s just a misperception that if we were to go to the gold standard that we would have more stable prices.”
An idea that keeps coming back around
The gold standard has a long history in Republican economics.
In the 1980s, President Ronald Reagan launched the first Gold Commission, headed by monetarist Anna Schwartz, who eventually came out against the endeavor with her colleague Milton Friedman.
But the Republican Party revived the idea in its 2012 and 2016 campaign platforms, calling for a new commission to investigate the viability of a return to gold standard system. Former GOP presidential candidates, including Senators Ted Cruz of Texas and Rand Paul of Kentucky, have supported the idea.
As a candidate, Trump told GQ magazine: “Bringing back the gold standard would be very hard to do, but, boy, would it be wonderful. We’d have a standard on which to base our money.”
The idea that gold, or for that matter silver or platinum, has an objective value and a fixed supply, therefore it’s not susceptible to inflation or manipulation, has been amply refuted by experience.
For one thing, the existence of mines proves the supply is not fixed. This should be glaringly obvious.
Then there’s nothing preventing any government, or worse anyone at all, form reducing the specie in coins. This happened with the silver denarius in the Roman Empire, which did horrible things to the economy (plus the Romans did not understand inflation). It got so bad that soldiers were paid in kind, and taxes were collected in kind as well. I mean, it’s really bad when a government won’t accept the money it mints, right?
Fun related fact: Isaac Newton came up with the idea of putting ridges on coins, as a means of foiling the practice of coin-clipping.
Wikipedia says in 2016 she was on Ben Carson’s campaign, and wants to have a new Bretton Woods style agreement for countries to return to the gold standard, hopefully taking place at Mar-A-Lago.
The idea that gold, or for that matter silver or platinum, has an objective value and a fixed supply, therefore it’s not susceptible to inflation or manipulation, has been amply refuted by experience.
I think the real problem is not inflation but rather deflation: gold just sits there and gains value as others actually produce stuff. If we simplify and assume that the supply of gold does not increase, then you could say that someone holding 1% of available gold 2,000 years ago would be worth 1% of the world’s value today. Good work if you can get it. As usual in conservative circles, it appeals to those with either too much money or too few brain cells.
@Kit: And gold does have value in electronics and heat shields. I see no good in making high end electrical connectors prohibitively expensive.
Saw an article that said recovery from the Great Depression was pretty much a question of how soon each country went off gold. Churchill as Chancellor of the Exchequer put Britain back on gold way too soon after WWI, a big driver of the Depression. I would say a bigger mistake than Galipoli. There was some chance Galipoli could work.
The whole gold thing might sound like just basic idiocy of the Tea Party variety, but I suspect its much more cynical than that. The gold scam is especially heavy on Fox News and if this pick generates enough controversy the publicity will inevitably drive more gullible retirees to further dilute their savings by another 40-50%. (The way the gold scam works is that they sell you coins or bars at 30-50% over the price of raw gold and then guarantee that they will buy it back at “market rates”.)
I have listened to many gadflys claim that since the $ is not based on gold it has no value.
When I ask them to empty their wallets and their bank accounts and give me their cash since it is worthless they always comply.
@Teve: If Trump puts that question on by executive order, we are almost guaranteed to have a decade of lawsuits challenging everything based on the census. I hope decent people can eventually turn that to our advantage.
@MarkedMan: Trump’s an authoritarian but a coward. If he had stones he’d say “How many divisions does John Roberts have?” and just order the forms printed with the question on it.
@Moosebreath: the northern latitudes have gone nuts lately. I think i read a few months ago that some regions of the arctic were like 40º above long-term normal?
Ha, the call with Judge Hazel at 2:00 p.m. (now) should be fun. President Trump came right out and said that the reason for the citizenship question was to adjust the numbers in electoral districts.
@Teve: Maybe I’m too cynical, but I’ve thought for a long time that the only interest Ron Paul, this yahoo, and other gold bugs have in returning to the gold standard it the hyperinflation of the value of gold it would cause (or as an alternative, the hypercontraction and revaluation of currency it would trigger, but I don’t see how they would profit from that). It’s always had an underpants gnomes quality to it, in my thinking at least.
I believe the term is “cutting off one’s nose to spite one’s face.”
In the 1980s, President Ronald Reagan launched the first Gold Commission, headed by monetarist Anna Schwartz, who eventually came out against the endeavor with her colleague Milton Friedman.
Which may merely prove that Schwartz and Friedman are the only two conservative economists in the world who can do arithmetic.
This, and the temperature in Anchorage, are both data points leading to the conclusion the Republican Party must be destroyed, root and branch.
James had a piece recently about the dearth of higher education opportunities in rural areas. Other than the U system, Alaska has a few Community Colleges and two four year religious affiliated schools and an Orthodox graduate seminary. And unlike Montana, you can’t drive a few hours to Bismarck.
This, and the temperature in Anchorage, are both data points leading to the conclusion the Republican Party must be destroyed, root and branch.
The Republicans didn’t used to be like this. They used to build things and develop infrastructure and human resources. What the hell happened to that party?
I’ve read parts of the Old Testament and pretty much nothing of the New(*). From commentary on both, it seems the OT god is your typical capricious bronze-age deity (ask Job), while the NT god is more of an enlightened, benevolent despot type.
… and this reminded me both of “A History of God” by Karen Armstrong and another book (or books?) by Neal Stephenson, Snow Crash (although there might be others where he discusses ancient religion. Both put the god of the Old Testament into historical context, with Armstong no doubt being more accurate but Stephenson being more entertaining. One tidbit that got me thinking was the commandment: “I am the Lord thy God. Thou shalt not put other gods before me.” Which, when you think about even for a minute, seems to imply that at the time it was written the Hebrews believed in multiple gods. After all, it doesn’t say “I and the Lord thy God. All other gods are false”, just that they should consider him first amongst the gods. This is consistent with what is known about those times.
But bible thumpers, or koran thumpers, tend to worship the book and what they’ve been told about it, and have little time for the actual god(s) described therein…
We really need to start a betting pool on “Drama of the day” and how he talks it up, backs down, then talks it up again. He’s apparently announced “more immigration raids”…..but with less details this time, so maybe his babysitters won’t yell at him and put him in timeout for giving up the nuclear codes so easily!!!
FIXING PRESIDENTIAL ELECTIONS WITHOUT GETTING RID OF THE ELECTORAL COLLEGE
Premise: the Electoral College is bad. I have read many defenses of the Electoral College in the last few months, but I haven’t read any good ones. It’s a bad idea. It was never good, and it’s worse now.
But the Constitution is hard to change. Heck, we couldn’t pass the Equal Rights Amendment.
So what could be done differently, short of a Constitutional amendment, to make the EC more properly represent the country?
My suggestion: radically increase the size of the House of Representatives, and thus the Electoral College.
The number of House members is capped at 435 because of the Reapportionment Act of 1928. The number of Electors is equal to the sum of House and Senate members. As the population has increased over the last century, this makes the Electoral College less and less representative.
If Congressional apportionment were more reasonable, we’d have about twice the number of Representatives as we do now, and the Electoral College would more closely approximate the population.
It’d be hard to pass, but not as hard as an amendment. No amendment needed.
My brother lives in Phelan (feelin) CA, about 100 miles south of Ridgecrest via
US Route 395.
He just texted me that tonights earthquake was definitely stronger than yesterdays.
USGS web site is calling this one 7.1.
No damage in his neighborhood. So far.
The fact is that the mainstream conservative agenda has always been unpopular, and needed to be sold with racism and lies. At some point the right-wing elite was likely to lose control to someone who said the dogwhistles out loud, but that was a risk they needed to take
One tidbit that got me thinking was the commandment: “I am the Lord thy God. Thou shalt not put other gods before me.” Which, when you think about even for a minute, seems to imply that at the time it was written the Hebrews believed in multiple gods.
There are many ways to interpret that, not all involving the existence of other gods. But overall polytheism is the norm in most human societies, with a kind of monotheism, sometimes, being developed later on. So it’s not just possible but overwhelmingly likely the old legends the Torah is based on, date to a polytheistic era in the development of the ancient Hebrews.
Consider, too, that religion was a major political force in many cultures. The Romans had various priests as magistrates in the republic and empire eras, including the Head Priest or Pontifex Maximus. In Egypt it was even worse, as their various gods owned land and other goods, or rather, in reality and for practical effects, the temples and priests of the various gods owned these things. Some believe Akhenaten developed his monotheistic cult of the Aten, declaring all other gods to be false, in part or in whole, as a menas of stripping power from the priests of Amun.
It didn’t work or him, and no one ever tried it in Egypt again, but having one god instead of many could simplify matters for the ruler and allow for better control of the priests and the populace. So it’s kind of a wonder it didn’t happen more often.
BTW, thanks for the book recommendations. They seem very interesting.
I don’t know if it’s because Trump has just been especially terrible lately, but for the last month the trolls have really been absent, and these comments sections have been even better than usual.
A handful of right-wing activists are in Chappaqua right now, filing criminal complaints with the local police department demanding the arrest of Hillary Clinton.
Also if you read the OT in Hebrew, you’ll find the first mention of a deity is to a) a female with b) a masculine plural ending.
I presume you’re talking about the word elohim, loosely translated as “god(s),” but I don’t know what you mean by saying its first mention is to a female. The word first appears in the very first verse of Genesis: “In the beginning Elohim created the heavens and the earth.”
Hebrew has a few words that are plural in form but singular in meaning. For example, the word for face, panim, is grammatically plural and even takes plural conjugation. It’s more or less comparable to English words like scissors or pants. You say, “Do these pants make my butt look big?” as opposed to “Does this pants make my butt look big?”–even though you’re talking about a single article of clothing, either way. Now, elohim is in a slightly different category, as it sometimes takes singular conjugation, sometimes plural–depending on whether it’s talking about one God or multiple gods. So, in the above verse, we know it’s intended as singular because the word “created” is in singular form. But in the verse that says “Thou shalt have no other gods before me,” the word “other” is in plural form.
Trump picks another Fed member who believes in the gold standard. This one really means it
@Teve:
The idea that gold, or for that matter silver or platinum, has an objective value and a fixed supply, therefore it’s not susceptible to inflation or manipulation, has been amply refuted by experience.
For one thing, the existence of mines proves the supply is not fixed. This should be glaringly obvious.
Then there’s nothing preventing any government, or worse anyone at all, form reducing the specie in coins. This happened with the silver denarius in the Roman Empire, which did horrible things to the economy (plus the Romans did not understand inflation). It got so bad that soldiers were paid in kind, and taxes were collected in kind as well. I mean, it’s really bad when a government won’t accept the money it mints, right?
Fun related fact: Isaac Newton came up with the idea of putting ridges on coins, as a means of foiling the practice of coin-clipping.
Wikipedia says in 2016 she was on Ben Carson’s campaign, and wants to have a new Bretton Woods style agreement for countries to return to the gold standard, hopefully taking place at Mar-A-Lago.
The Best People.
Seen on the internet:
“One if by land, Two if by Logan?”
@Kathy:
I think the real problem is not inflation but rather deflation: gold just sits there and gains value as others actually produce stuff. If we simplify and assume that the supply of gold does not increase, then you could say that someone holding 1% of available gold 2,000 years ago would be worth 1% of the world’s value today. Good work if you can get it. As usual in conservative circles, it appeals to those with either too much money or too few brain cells.
@Kit: And gold does have value in electronics and heat shields. I see no good in making high end electrical connectors prohibitively expensive.
Saw an article that said recovery from the Great Depression was pretty much a question of how soon each country went off gold. Churchill as Chancellor of the Exchequer put Britain back on gold way too soon after WWI, a big driver of the Depression. I would say a bigger mistake than Galipoli. There was some chance Galipoli could work.
seen on the internet:
Yeah! Fuck that liberal DemonCrap Supreme Court!
Going on the gold standard will be particularly amusing in light of NASA’s projected mission to an asteroid with an estimated $10,000 quadrillion amount of precious metals.
(Either that, or some guy in a garage finally does manage to get the damn filter working that will accumulate all the gold dissolved in seawater.)
Snicker.
The whole gold thing might sound like just basic idiocy of the Tea Party variety, but I suspect its much more cynical than that. The gold scam is especially heavy on Fox News and if this pick generates enough controversy the publicity will inevitably drive more gullible retirees to further dilute their savings by another 40-50%. (The way the gold scam works is that they sell you coins or bars at 30-50% over the price of raw gold and then guarantee that they will buy it back at “market rates”.)
I have listened to many gadflys claim that since the $ is not based on gold it has no value.
When I ask them to empty their wallets and their bank accounts and give me their cash since it is worthless they always comply.
@Teve: If Trump puts that question on by executive order, we are almost guaranteed to have a decade of lawsuits challenging everything based on the census. I hope decent people can eventually turn that to our advantage.
@MarkedMan: Trump’s an authoritarian but a coward. If he had stones he’d say “How many divisions does John Roberts have?” and just order the forms printed with the question on it.
@Teve:
“It’s 90 degrees in Anchorage, Alaska today for the first time in recorded history.
We are in a climate emergency, America.”
In July 1993, I was in Anchorage, and they were complaining about their heat wave, because it hit 75.
@Moosebreath: the northern latitudes have gone nuts lately. I think i read a few months ago that some regions of the arctic were like 40º above long-term normal?
Ha, the call with Judge Hazel at 2:00 p.m. (now) should be fun. President Trump came right out and said that the reason for the citizenship question was to adjust the numbers in electoral districts.
@Teve: Maybe I’m too cynical, but I’ve thought for a long time that the only interest Ron Paul, this yahoo, and other gold bugs have in returning to the gold standard it the hyperinflation of the value of gold it would cause (or as an alternative, the hypercontraction and revaluation of currency it would trigger, but I don’t see how they would profit from that). It’s always had an underpants gnomes quality to it, in my thinking at least.
I believe the term is “cutting off one’s nose to spite one’s face.”
Which may merely prove that Schwartz and Friedman are the only two conservative economists in the world who can do arithmetic.
@Moosebreath: This piece at LGM, ALASKA IS BURNING, BUT SO IS EVERYTHING ELSE, actually has nothing to do with climate. It’s about the Governor of Alaska torching the University.
This, and the temperature in Anchorage, are both data points leading to the conclusion the Republican Party must be destroyed, root and branch.
James had a piece recently about the dearth of higher education opportunities in rural areas. Other than the U system, Alaska has a few Community Colleges and two four year religious affiliated schools and an Orthodox graduate seminary. And unlike Montana, you can’t drive a few hours to Bismarck.
@gVOR08:
The Republicans didn’t used to be like this. They used to build things and develop infrastructure and human resources. What the hell happened to that party?
On another thread, Kathy remarked:
… and this reminded me both of “A History of God” by Karen Armstrong and another book (or books?) by Neal Stephenson, Snow Crash (although there might be others where he discusses ancient religion. Both put the god of the Old Testament into historical context, with Armstong no doubt being more accurate but Stephenson being more entertaining. One tidbit that got me thinking was the commandment: “I am the Lord thy God. Thou shalt not put other gods before me.” Which, when you think about even for a minute, seems to imply that at the time it was written the Hebrews believed in multiple gods. After all, it doesn’t say “I and the Lord thy God. All other gods are false”, just that they should consider him first amongst the gods. This is consistent with what is known about those times.
But bible thumpers, or koran thumpers, tend to worship the book and what they’ve been told about it, and have little time for the actual god(s) described therein…
@MarkedMan: Also if you read the OT in Hebrew, you’ll find the first mention of a deity is to a) a female with b) a masculine plural ending.
@MarkedMan:
A whole bunch of mild-mannered WASP Northeasterners were replaced with bible-thumping Southeasterners.
@MarkedMan: Easy peasy. The people who used to develop infrastructure and do things left the party to become Democrats. 😉
That whole Party of Stupid thing is having consequences.
We really need to start a betting pool on “Drama of the day” and how he talks it up, backs down, then talks it up again. He’s apparently announced “more immigration raids”…..but with less details this time, so maybe his babysitters won’t yell at him and put him in timeout for giving up the nuclear codes so easily!!!
Seen on the series of tubes:
My brother lives in Phelan (feelin) CA, about 100 miles south of Ridgecrest via
US Route 395.
He just texted me that tonights earthquake was definitely stronger than yesterdays.
USGS web site is calling this one 7.1.
No damage in his neighborhood. So far.
Shake Scale
Kawhi and Paul George to the Clippers, Danny Green to the Lakers.
@MarkedMan:
There are many ways to interpret that, not all involving the existence of other gods. But overall polytheism is the norm in most human societies, with a kind of monotheism, sometimes, being developed later on. So it’s not just possible but overwhelmingly likely the old legends the Torah is based on, date to a polytheistic era in the development of the ancient Hebrews.
Consider, too, that religion was a major political force in many cultures. The Romans had various priests as magistrates in the republic and empire eras, including the Head Priest or Pontifex Maximus. In Egypt it was even worse, as their various gods owned land and other goods, or rather, in reality and for practical effects, the temples and priests of the various gods owned these things. Some believe Akhenaten developed his monotheistic cult of the Aten, declaring all other gods to be false, in part or in whole, as a menas of stripping power from the priests of Amun.
It didn’t work or him, and no one ever tried it in Egypt again, but having one god instead of many could simplify matters for the ruler and allow for better control of the priests and the populace. So it’s kind of a wonder it didn’t happen more often.
BTW, thanks for the book recommendations. They seem very interesting.
I don’t know if it’s because Trump has just been especially terrible lately, but for the last month the trolls have really been absent, and these comments sections have been even better than usual.
João Gilberto 1931-2019
RIP
video footage
@grumpy realist:
I presume you’re talking about the word elohim, loosely translated as “god(s),” but I don’t know what you mean by saying its first mention is to a female. The word first appears in the very first verse of Genesis: “In the beginning Elohim created the heavens and the earth.”
Hebrew has a few words that are plural in form but singular in meaning. For example, the word for face, panim, is grammatically plural and even takes plural conjugation. It’s more or less comparable to English words like scissors or pants. You say, “Do these pants make my butt look big?” as opposed to “Does this pants make my butt look big?”–even though you’re talking about a single article of clothing, either way. Now, elohim is in a slightly different category, as it sometimes takes singular conjugation, sometimes plural–depending on whether it’s talking about one God or multiple gods. So, in the above verse, we know it’s intended as singular because the word “created” is in singular form. But in the verse that says “Thou shalt have no other gods before me,” the word “other” is in plural form.