Sunday, December 23, 2007

Megan McArdle Bitchslaps Ron Paul 
But then you don't have to work very hard to do that.

No Ron Paul supporter (or other gold standard advocate) has managed to articulate to me what problem the gold standard solves. Inflation is low, and even better, relatively predictable, so the expectation is built into asset prices. Moreover, most people on fixed incomes are retirees, and most retirees get almost half their income from Social Security, which is indexed for inflation.

This Ron Paul speech lists a number of reasons, all of them wrong:

Read the whole thing.

Natch, McArdle, whom I like to refer to as the Future Mother of My Children(TM) (an honor she shares with Lara St. John, but for different reasons), naturally then attracts a host of Paulbots laying down an obscuration barrage. The Paulbot morons are a source of entertainment in themselves.

Here's the thing: Ron Paul and the goldbugs frequently like to assume a populist stance with their rhetoric. But a return to the gold standard is a return to hard money. And that is, at its core, a fundamentally unpopulist position!!!

Returning to the Gold standard means a return to an inelastic monetary policy that overwhelmingly favors, you know, the New York money people.

And unlike Ron Paul supporters and dumbass Democrats, when I say the New York money people, I don't mean Jews. I mean the REAL New York money people -- WASPs. A hard money policy overwhelmingly favors the owners of capital.

Honestly, I'm agnostic as to whether the gold standard is a great idea or not. But I'm not agnostic as to whether Paulbots are morons. They are, almost without exception.

Don't give me that libertarian crap. Glen Reynolds is a libertarian. Ron Paul is a crazed nutjob who plays footsie with even crazier nutjobs.

And he's not even any fun!!!!

For fun, I refer you to the Mogambo Guru, whom I used to turn to for color quotes back in my days editing investment newsletters.

Now, watch the Paulbots roll in. How's that Technorati alert working for you, assholes?

Splash, out


"No Ron Paul supporter (or other gold standard advocate) has managed to articulate to me what problem the gold standard solves."

- That's easy. For starters, how bout the illegality of the current system? What does the constition say is legal tender?

Article 1 (The Legislature), Section 10 (Powers Prohibited to the States), Clause 1: "No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

So, the question to you is: Do you support the Constitution of the United States?
"Inflation is low, and EVEN BETTER (emphasis mine), relatively predictable ....."

Wow, just what alternate universe do you live, shop, and pay bills in? In contrast to the completely fraudulant and laughably unrealistic "official" CPI numbers, everyone I know in the real world has been experiencing a 8-10% (and growing) annual inflation rate for the last several years. This is "low"? And don't even try to give me the government's absurd 2.whatever% annual inflation rate if you want to remain credible in this debate.

As bad as the current ~10% rate is, I fear much worse in the coming year or two, as do many economists outside of the corporate media. Given the rampantly unsustainble public and private spending in the US, future raging inflation is what I find more "predictable". Welcome to Zimbabwe.
I think that some kind of gold standard, perhaps a currency-board-type system that bought/sold gold to maintain the value of the USD within a range specified by legislation, would be superior to our current discretionary monetary mgmt by the Fed. However, I am not certain that this is the best way to do it. Also, note that it is already perfectly legal to make transactions in gold and hardly anyone does it, so I don't quite understand what the gold bugs are yelling about. A well-designed gold standard is one thing; using gold shekels because the US dollar is illegal, or whatever, is crankery.
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