I really have to get on with my day job, so I’m going to try to avoid the blogging itch as much as possible over the next while. But I just can’t stop myself over the latest GOP flirtation with goldbuggery.
As you probably have heard, the Serious, Bold, Sober Party of Fiscal Discipline™ has at least in draft platform language asserted that it is the policy of the Republican party to explore the idea of restoring the US currency to the gold standard.
Y’all can stop laughing — or crying– now.
Paul Ryan, that intellectual powerhouse, the brilliant force that so-kicks-liberal-ass-in-the-gym-and-in-the-head-so-there is on board. He might try to defend himself by saying that he supports basing US currency not on gold per se, but on a basket of commodities.
But as Yglesias points out, that’s a distinction without a difference. And it’s not even really true. Dave Weigel notes that Ryan himself locates the root of his thoughts on currency to yet one more bit of Ayn Rand undigestible prose, the Francisco d’Anconia speech in which Rand’s “character”* declares
“It is not the moochers or the looters who give value to money. Not an ocean of tears nor all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. Those pieces of paper, which should have been gold, are a token of honor – your claim upon the energy of the men who produce.”
Yup. Not just a gold standard, but, as Krugman marvels, a gold coinage.
Just to pause on the deep, limpid, unruffled well of stupid required to advocate a gold coinage in place of folding money as an instrument of daily exchange, consider this. At this week’s prices the lightest US coin, the dime, would, if made of gold, be worth around $120. A gold quarter would run over $300. I know that no one — not even the most whacked out GOPsters I’ve been able to find — actually expects us to walk around with socks full of gold dust to trade, but given Ryan’s declared love of this particular passage of Randsanity, I think it worth noting that the reason folks outside the asylum don’t ever take Rand seriously is that the stuff is absurd on every level. It’s turtles all the way down.**
As you can tell from the linkage above, the whole notion has come in for the a surfeit of ridicule, astonishment, and a general reminder from lots of folks about just how radical, reckless and plain dumb is the GOP, Ryan and Romney approach to the real world. Ezra Klein’s take is a fine place to start.
So no need to repeat what others have said on this: if you can’t figure out why the gold standard is such a crap idea, then I’m not going to make any more impact on you than any of the rest of experience.
Instead, I want to pose a choice. If one were to think about national problems, who should one trust: Paul Ryan or Benjamin Franklin?
Here’s Franklin, writing on the need for the Commonwealth of Pennsylvania to issue paper money to make up for a shortage of metal coinage. First up is a passage from near the beginning of his landmark pamphlet from 1729, The Nature and Necessity of a Paper-Currency:
All those who are Possessors of large Sums of Money, and are disposed to purchase Land, which is attended with a great and sure Advantage in a growing Country as this is; I say, the Interest of all such Men will encline them to oppose a large Addition to our Money. Because their Wealth is now continually increasing by the large Interest they receive, which will enable them (if they can keep Land from rising) to purchase More some time hence than they can at present; and in the mean time all Trade being discouraged, not only those who borrow of them, but the Common People in general will be impoverished, and consequently obliged to sell More Land for less Money than they will do at present. And yet, after such Men are possessed of as much Land as they can purchase, it will then be their Interest to have Money made Plentiful, because that will immediately make Land rise in Value in their Hands. Now it ought not to be wonder’d at, if People from the Knowledge of a Man’s Interest do sometimes make a true Guess at his Designs; for, Interest, they say, will not Lie.
No flies on Ben. Not to mention, the more things change…R-Money represents those with money, and everything he and his party advance should be viewed with that in mind.
And here’s Franklin’s conclusion:
Upon the Whole it may be observed, That it is the highest Interest of a Trading Country in general to make Money plentiful; and that it can be a Disadvantage to none that have honest Designs. It cannot hurt even the Usurers, tho’ it should sink what they receive as Interest; because they will be proportionably more secure in what they lend; or they will have an Opportunity of employing their Money to greater Advantage, to themselves as well as to the Country. Neither can it hurt those Merchants who have great Sums out-standing in Debts in the Country, and seem on that Account to have the most plausible Reason to fear it; towit, because a large Addition being made to our Currency, will increase the Demand of our Exporting Produce, and by that Means raise the Price of it, so that they will not be able to purchase so much Bread or Flower with £100 when they shall receive it after such an Addition, as they now can, and may if there is no Addition: I say it cannot hurt even such, because they will get in their Debts just in exact Proportion so much the easier and sooner as the Money becomes plentier; and therefore, considering the Interest and Trouble saved, they will not be Losers; because it only sinks in Value as a Currency, proportionally as it becomes more plenty. It cannot hurt the Interest of Great Britain, as has been shewn; and it will greatly advance the Interest of the Proprietor. It will be an Advantage to every industrious Tradesman, &c. because his Business will be carried on more freely, and Trade be universally enlivened by it. And as more Business in all Manufactures will be done, by so much as the Labour and Time spent in Exchange is saved, the Country in general will grow so much the richer.
Philadelphia, April 3. 1729.
“If interest be not yet low enough for the advantage of trade and designs of setting the poor on work…the only proper way to lower it is more paper credit till by trading and business we can get more money.” Radically, he added that “Tis mere opinion that sets a value upon [metal] money,” adding “we value it because we can purchase all sorts of commodities and the same opinion sets a like value upon paper security.”¹
Strontium 90
Frist!
srv
Neil Armstrong has passed.
Maude
@srv:
RIP.
Linda Featheringill
OT but interesting.
Third party candidate for President has filed in Virginia.
http://www.roanoke.com/politics/wb/313266
[If I had money, I’d be tempted to send him some.]
Davis X. Machina
Goldbuggery’s a theology, and therefore not only resistant to refutation by argument, the more absurd it is shown to be by argument and experience, the greater faith is required to believe it.
And since the greater the faith, the greater the merit, you gain the greatest merit by believing in the completely insane.
Tertullian of Carthage was the first Republican.
Eric
Wouldnt going to gold coinage favor “those people” with all the gold chains? Franklin i refute you thus.
Chyron HR
@srv:
It’s a hoax. I can tell because his breath is still making the flag flutter.
MattF
Yeah, but Ryan’s got blue eyes, washboard abs, and, as was pointed out a few days ago by Mr. Brooks, he’s been interviewed by All The Right People(TM).
Linda Featheringill
More on topic:
Tom, you expect me to understand the ins and outs of switching to a gold standard?
Except that it is really retro and the economy is actually moving towards electronic credits, like on the scifi shows on TV.
danah gaz (fka gaz)
The stupid. It burns.
There is not a single advanced nation that would entertain this idea outside of the USA. Just like creationism, this mind-blistering dumbstupid is a uniquely American phenomenon. Exceptionalism indeed.
scav
Their platform really is developing into a we cater to all freaks buffet in an attempt to attract and pacify the necessary rabble.
Argive
@srv:
We came in peace for all mankind.
RIP Cmdr. Armstrong.
arguingwithsignposts
As was mentioned in an earlier post referencing this speech, IIRC, apparently, this bit of hackery is a wedding speech!
jwb
Fascinating, and very much looking forward to your new book. It’s really alarming how quickly the GOP is discarding centuries of hard-won knowledge.
trollhattan
@MattF:
Brooks was far, far worse than usual on yesterday’s ATC, trying to be artfully blase about the Aiken impact on Willard as the convention loomed. I realize he doesn’t really possess an A game but this was really weak stuff even for him.
Leo
Actual conversation with a coworker:
Him: I’m buying pulling money out of the stock market, buying gold.
Me: That’s a good idea. Investing in businesses is risky, but gold always holds its value because gold is so pretty and shiny.
Him: …
Seriously, the gold nut stuff is so freaking stupid, but it really appeals to a certain kind of mind. Obnoxious.
c u n d gulag
Also too – A paper buck bill, is worth a buck.
A paper ten-spot, worth ten bucks.
Let’s say that we switch over, and the gold dime is, indeed, worth $120.
Now, let’s say the price of gold goes up 25% today, for whatever reason.
That gold dime is still worth $120, right?
Or is it worth $150 today?
And if the price goes up 33% tomorrow, is it now worth $200?
And if it’s still worth only $120, why wouldn’t I melt it, and all of my other fixed-price gold coins, down, into ingots, and sell them at the higher price, taking home a tidy profit?
You can’t melt a whole lot of paper “Benjamin’s” if the worth of the dollar rises.
And what if the price drops?
Either I’m missing something, ’cause I’ll admit, when it comes to money, I ain’t too bright, but a gold coin based economy sounds like it’s the feckin’ stupidest idea of all time – and there’a a lot of really feckin’ stupid idea’s from Conservatives for it to compete with.
The Dangerman
Is there a bigger example of “you didn’t build that” than Apollo?
RIP, Commander Armstrong.
arguingwithsignposts
@Leo: well played, sir.
Redshift
@arguingwithsignposts: Which reminds me of one of my favorites from Yiddish Curses for Republican Jews:
May your child give his Bar Mitzvah speech on the genius of Ayn Rand.
joel hanes
Link ostensibly to Krugman is actually a link back to this BJ frontpage post.
JGabriel
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Tom Levenson:
It’s also bullshit because, in practice, we already base US currency on a basket of goods: it’s how we measure inflation/CPI, and thus how we measure the value of the dollar — or at least changes in its value, though I suspect that’s a distinction without a difference.
.
Argive
@Leo:
I think the smart thing to do is not to invest in gold necessarily, but gold mining companies. Take advantage of people buying up shiny rocks as fast as some guys in China or South Africa can pull them from the ground.
Ann Rynd
Oh, the effect this will have on the fashion industry. Bigger pockets to carry around all those heavy coins. And we can revert to using abacuses, because nothing separates us from our money as much as computers do. I have known some stubborn, diehard, adolescent minded Objectivists before but Paul Ryan seems to have been conceived at a Nathaniel Branden seminar. This gold standard plank shows his extraordinary influnce on a party retreating from reality into a fantasy world from a third rate novel written by a demented, paranoaical speed addicted menapausal woman with bad teeth and worse breath.
MattF
@Leo: Also… if there’s some speculative financial play that you and your co-worker are just now hearing about, then–unless you happen to be working the bond desk at JPMC– the chances of making money on it are zero. And would be less than zero if that was mathematically possible.
KG
@Linda Featheringill: July polling showed Virgina a 12 point win for Obama if Goode was in the race… Some money to Goode and Johnson might not be a terrible idea to make Romney guard the right flank
Villago Delenda Est
You know, some obscure mid 20th Century British politician, who served in a very minor and without any influence at all government post during WWII, once said that returning Britain to the gold standard was the stupidest move he ever made.
Mind you, this is is from the same clown who came up with the Gallipoli offensive.
Roger Moore
@JGabriel:
No, it’s a distinction with a very important difference. By measuring the value of the dollar against a basket of goods, we accept the existence of inflation and make some attempt to keep it at a value that’s best for the economy. By fixing the value of the dollar to a basket of goods, we’re committing ourselves to a zero inflation policy, despite the proven danger of very low inflation. One of these is a sensible policy for the country as a whole. The other is a crazy policy that benefits the very rich at the expense of the rest of us.
TheStone
@arguingwithsignposts: Yeah, musta been some killa receptions the Objektivist Kult threw!
KG
@c u n d gulag: The problem would be wildly fluctulating prices… I can just imagine going to Best Buy and there being a digital sign with the price of gold and as it changes hourly, so do the prices on all the toys
Villago Delenda Est
Dubya Mittens Rmoney is unfit to lick the soles of the moon boots of Neil Armstrong.
RIP, first man on the Moon.
MikeJ
Wait, an 82 year old man died? Thanks a lot Obamacare.
trollhattan
@Leo:
Also, too, you can coat giant rims with it and just drive around on the stuff!
Mnemosyne
I don’t remember who it was, but someone in the comments pointed out yesterday how bizarre it is that the goldbugs seem to think there’s some kind of inherent value to gold beyond what humans have assigned to it that automatically makes it better than the pieces of paper that we have assigned value to.
But s/he said it better, with moar snark.
danah gaz (fka gaz)
You know, it’s not even that Hayek and Mises were completely wrong, or even mostly wrong. They may have been right about a lot of things… for their time.
The gold-standard is a 19th century idea, that was at least arguably well suited to 19th century economies (and those that preceded them).
In the 21st century (and the latter 20th), the idea simply does not work. All advanced economies rely on monetary and fiscal policies to help manage our dynamic and scalable economies. Without having those policy mechanisms, we’d be kneecapping ourselves. We would not be competitive. Also, the idea at this point would not be evolutionary, but revolutionary (and not in a good way). The market consequences of moving to a gold standard would be nothing short of disastrous. We’d become a 3rd world nation overnight.
Any way one can look at it, the very idea is so utterly boneheaded that anyone that even whispers it should be consigned to a lifetime of irrelevance, just like the flat earthers. Full stop. It’s completely ridiculous and indefensible. It speaks to such a fundamental lack of knowing how our world works that it simply cannot and should not be entertained for even a moment.
Mnemosyne
@TheStone:
If you haven’t already heard about Rand’s various affairs with the men in her circle, you should probably keep it that way. You’ll go broke buying brain bleach.
SiubhanDuinne
@The Dangerman:
Very well put.
And I add my “RIP” to the chorus. Neil Armstrong and his colleagues brought enormous joy 43 summers ago. I’m so glad I was able to experience it, beginning to end.
The Ancient Randonneur
If only they could figure out a way to keep the government out of the currency business!
trollhattan
O/T from the “An armed society is a polite society” files.
Imagine, if you will, twenty or thirty armed civilians in the mix, all trying to take down one guy (“which guy?!?”).
http://www.nytimes.com/2012/08/26/nyregion/bystanders-shooting-wounds-caused-by-the-police.html?_r=1&hp
danah gaz (fka gaz)
@KG: Considering we can synthesize diamonds, and the scientific community has been tinkering with “designer atoms”, I wonder how long it will be before we can synthesize gold. Imagine what sort of effect *that* would have on gold prices. =) Instant commoditization. hehehe.
SiubhanDuinne
@Mnemosyne:
I only know about her affair with Nathaniel Branden. Were there others?
RedKitten
Good lord. I know very little about economics, but I DO know that when looking at potential mutual funds for my retirement portfolio, the “precious metals” fund performance line looked like the ECG printout of an 82-year old angina sufferer after dancing the salsa.
Why on EARTH would anybody think it’s a good idea to base the currency of a nation on something so unstable? Especially a nation whose finances can and do have an enormous ripple effect on international markets?
Villago Delenda Est
@The Ancient Randonneur:
Well, read The Wealth of Nations for the primer on keeping the government out of the currency business.
Oh, wait. The entire book is an argument for the government to be in the currency business.
Never mind.
arguingwithsignposts
@Mnemosyne:
Planet Money did a podcast some time back where they talked to a chemical engineer, and, after going through the entire periodic table, were able to ascertain that – at least among the elements – it makes sense that gold would be a good carrier of value. That’s not to comment on the merits of the argument for a gold standard, but it was an interesting exercise.
danah gaz (fka gaz)
@Villago Delenda Est: heh. Yeah. Adam Smith’s most staunch adherents don’t seem to be very familiar with his actual body of work. Funny thing, that. He and Jesus have at least that much in common, it seems.
Villago Delenda Est
OK, piercing blue eyes or a guy who knew how to get laid well into his 80’s?
Decisions, decisions…
Kristine
@Mnemosyne:
This. Gold has no inherent worth. Its value is a collective illusion agreed upon by enough people for it to stick.
Oops, I said “collective.” No gold for me.
Roger Moore
@The Ancient Randonneur:
Of course that’s exactly what they want. If we had a sensible, privately managed currency, it would be run for the benefit of the people who own the currency, not for the moochers and looters.
Mnemosyne
@SiubhanDuinne:
IIRC, there were others, but I’m not gonna go looking for them. The brain bleach issue, don’tcha know.
Argive
@danah gaz (fka gaz):
The gold standard didn’t even work that well in the latter 19th century. Money was extraordinarily tight throughout large swaths of the country in the 1880s and 1890s (mostly rural areas) and the resulting poverty was just incredibly bad. Altering the gold standard and allowing the coinage of silver as well as gold (silver was something like six times more prevalent) was a major part of the Democratic Party’s platform during the 1896 election. Coining silver was what William Jennings Bryan supported when he said “you shall not crucify mankind upon a cross of gold.”
If the gold standard didn’t work in 1896, why the hell would anyone be crazy enough to think that it would work now? Keynes was right when he called the gold standard a “barbarous relic.”
danah gaz (fka gaz)
@Kristine: I’d disagree with that insomuch as gold has very specific and valuable engineering applications. In electronics alone, it is highly prized as a good conductor, that is easily malleable and is resistant to corrosion.
None of this should be read as an advocacy for the gold standard. I was simply picking nits. =)
JGabriel
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Roger Moore:
Good point. Thanks for the correction. I still submit that the value of the dollar is predicated on the goods and services we can buy with it, but you’re right about the distinction. Fixing the dollar on a basket of goods would tie the hands of monetary policy.
.
danah gaz (fka gaz)
@Argive: I was being as charitable as I could be. That said, your point is well received. =)
Mnemosyne
@arguingwithsignposts:
There’s a difference between “it makes sense as an object that humans would assign value to” and “it has inherent value beyond what humans have assigned to it.”
If we were going to go with elements that have inherent value, I’d go with oxygen, carbon and nitrogen over gold since those are the building blocks of life and continued existence.
JGabriel
@Argive:
Because they worship Ayn Rand and think suffering is the proper state for anyone not as financially advantaged as themselves.
.
danah gaz (fka gaz)
@JGabriel: Or maybe they just want to get back at the people that had the good sense to not subject themselves to suffering through Ayn Rand’s terrible novel.
arguingwithsignposts
@Mnemosyne: Well, technically, nothing has inherent value, because humans are the only beings who are assigning value. You assume a priori that the continuing existence of life is valuable. :)
all sorts of pedantry up in here today.
jimmiraybob
The national Republican Party platform will remain incomplete until they adopt a plank singling out critical thinking skills as something to be eliminated from the schools. The Texas 2012 Party brethren are just that bold and advanced. And by bold and advanced I mean aiming for a rural 10th century Medieval America.
By the way, whatever happened to the GOP idea of bartering chickens and rutabagas? That one had real promise. Can’t chickens and rutabagas be tied to gold?
danah gaz (fka gaz)
@arguingwithsignposts: “You assume a priori that the continuing existence of life is valuable”
That was a point on which Douglas Adams had a few things to say. ;)
“In the beginning the Universe was created. This has made a lot of people very angry and been widely regarded as a bad move.”
QFT
Davis X. Machina
@jimmiraybob: Not if it means you can give your hedge-fund manager every year 2 chickens and 20 rutabagas….
Villago Delenda Est
@danah gaz (fka gaz):
So long, and thanks for all the fish!
danah gaz (fka gaz)
@jimmiraybob: rutabagas have no intrinsic value. blech
Roger Moore
@JGabriel:
Actually, I should correct myself even further. By tying the dollar to a basket of goods, we’re abandoning any kind of fiscal policy at all. The goal is to set a zero inflation policy, but the practical effect is to set inflation to whatever happens to happen with the commodities we’ve selected for our goods basket. If somebody discovers a new stock of one of the commodities in the basket, or a cheaper way of producing one of the goods in it, we get automatic inflation. If something happens to remove a commodity or make manufacturing a good more expensive, we get deflation.
In neither case can we do anything about it without explicitly changing the set of goods in the basket. So the net result is random fluctuations in inflation, sometimes positive, sometimes negative, interspersed with sudden jumps when we decide to revalue our goods basket. Not to mention the practical problems with explicitly tying currency to a goods basket rather than a single commodity, or that the decision to revalue the goods basket would be politically fraught and an invitation to massive corruption on the part of the people doing the revaluing. Doesn’t that sound ever so much more sensible than our current system?
danah gaz (fka gaz)
@Roger Moore: This.
Ann Rynd
Gold has always had an hypnotic affect on humans. It is incorruptible, impervious to rust and mold. You can dig up a piece of gold jewelry buried for a thosand years, brush off the dirt and still see the marks of original goldsmith. It seems to promise imortality. It is soft and seems to melt under your fingers and it is heavy. It seems to defy all the natural laws that govern other materials. And polish it and it will reflect your image back to you with a magical glow. There is a reason men love gold so.
Mnemosyne
@arguingwithsignposts:
I dunno. I know you can’t ask them the question, but I’m pretty sure that plants find nitrogen to be valuable and every known animal on earth finds oxygen to be valuable.
But, since we’re being pedantic, it sounds as though you’re assuming that everything that has value is also a commodity that can be bought or sold for that value. That’s very human of you.
:-)
TheStone
@Mnemosyne: I’ve confronted a few of those tales and I will not forgive you for reminding me.
trollhattan
@Davis X. Machina:
Who was the Nevada trixie running for senate who said you could just barter chickens for healthcare? She was actually less loony than eventual candidate Sharon Angle.
danah gaz (fka gaz)
@trollhattan: Sue something or other. I only remember her as “Chicken Sue”.
ETA: Sue Lowden. Google is god’s gift to mankind. =)
Roger Moore
@Argive:
Because they own gold and/or gold mines, so it would work very well for them personally. Who gives a damn about the economy as a whole when there are massive personal profits to be made?
Xenos
Do today’s farmers and rural-Americans even know about the ‘Cross of Gold’ speach, or how the gold standard tends to vacuum up the wealth of the countryside and deposit in bankers’ hands?
All the subsidies in the world could not save the countryside if we went back on the gold standard.
Xenos
Do today’s farmers and rural-Americans even know about the ‘Cross of Gold’ speach, or how the gold standard tends to vacuum up the wealth of the countryside and deposit in bankers’ hands?
All the subsidies in the world could not save the countryside if we went back on the gold standard.
danah gaz (fka gaz)
@Mnemosyne: “You’ll go broke buying brain bleach”
I humbly suggest “Brain Bleach” as an alternative to the gold-standard. We can control costs by muzzling republicans, or by giving them bullhorns, video cameras and wetsuits (depending on which way we want to turn inflation)
Roger Moore
@Roger Moore:
Oops, that should be monetary policy. We’d obviously still have a fiscal policy, but it might be harder to design a sane one without a sensible monetary foundation to build it on.
danah gaz (fka gaz)
@Roger Moore: I actually read the latter part of what you just said into your initial post on this. Fiscal policy would indeed take a hit without a reasonable monetary policy, as far as I can tell. I thought that’s what you were implying to begin with.
ETA: During the Great Depression, FDR’s administration seemed (as I read things) to be vexed by the constraints of a limited monetary policy. They had to rely heavily on fiscal policy, and to the small degree that they were able to manipulate monetary policy. It certainly made them do things differently than they would have been handled nowadays. Arguably there was even some “quantitative easing” going on in FDRs recovery attempts, but it didn’t look anything like what we would know it as today.
PurpleGirl
@danah gaz (fka gaz): If you are using gold for coinage and being the standard for economics, do you want to use it for things like electronics parts? What happens when all the gold in the earth has been mined? I forget how many tons of rock need to mined for a few ounces of gold.
Ruckus
Oh Dear FSM Are They Really That Dumb?
At the risk of mind numbing repetition,
Yes, yes they are.
A. Idiots.
B. Morons.
C. Stupid.
D. All of the above.
The correct answer is D. Theory inclusive of all possible points.
Theory proved.
danah gaz (fka gaz)
@PurpleGirl: An interesting point. I wonder what the cost of an iPad would be if we already allocated most of the world’s gold for our currency. ;)
Just to be clear though, in my previous post, I *did* say that “None of this should be read as an advocacy for the gold standard. I was simply picking nits. =)”
I was simply arguing against the idea that gold has no intrinsic value.
trollhattan
@danah gaz (fka gaz):
Thanks, that’s the one!
Amazing to consider without the tea party we’d have a Republican majority in the senate. They have a motherlode, if you will, of wackdoodle candidates and the vein runs deep and thick.
Anoniminous
The more I read and read about Her Ayn-ness the stronger my conclusion:
1. She was one rotten failure as a human being
2. She was an intellectual dwarf
(With apologies to J. R. R. Tolkien. No dwarves were harmed during the writing of this comment.)
Ruckus
@danah gaz (fka gaz):
If you took out the shinny, rare value would the industrial usage be an issue in world production?
Richard
The GOP has long based their policy on works of fiction, but this Randroid gold coin nonsense takes it to a whole other level
mai naem
RIP Neal Armstrong. That’s sad. You would have thunk the first man on the moon would have been in such great shape that he would have lived into his nineties. I know he had some cardiac surgery. I love the fact that he didn’t really try to get commercial endorsements using his name. I am sure he would have been a kazillionaire if he had.
danah gaz (fka gaz)
@Anoniminous: I disagree with #2, just because she managed to fool so many people. That takes a certain amount of smarts.
#1 I totally agree with. She was criminally lacking in a conscience, evidenced by (if nothing else), her high regard of William Edward Hickman.
PurpleGirl
@danah gaz (fka gaz): Yes, I realized you weren’t advocating for a gold standard. But I make beaded jewelry and every so often I use gold findings and follow the price of gold. I also know of so many industrial uses of gold. So I often wonder if we can continue to use gold industrially if we are using it to back the economy.
danah gaz (fka gaz)
@Ruckus: I don’t know. I’ve never run the numbers. I think it’s safe to say that modern electronics is significantly increasing the demand for it though, when you consider airbags, CPUs and other things in which it serves as an integral component. If anything, I think demand in that regard is more likely to increase (even exponentially) as our demand for fancy gear grows, at least barring some tech revolution that makes it obsolete.
RaflW
@Linda Featheringill:
“Except that [gold standard] is really retro and the economy is actually moving towards electronic credits, like on the scifi shows on TV.”
I think this is the nub of it. Old Americans™ are OK with plastic credit cards, but for some reason thinking about paying with your phone gives them the willies.
They know they’re being left behind by a culture that keeps getting younger, dammit, and they want that innovation to STOP RIGHT NOW.
My opinion as to the inane goldbuggery.
MaxxLange
<blockquoteNeil Armstrong has passed.
Even worse, I heard that he’s dead
Roger Moore
@danah gaz (fka gaz):
Yeah, gold is actually really cool stuff. The big problem with it is that it’s rare enough that we can’t use it for a lot of the things it would be really useful for. For a huge number of applications where you need a dense, easily worked, or corrosion proof metal, gold would be a better choice than whatever we’re using now if only it were common and cheap enough to be cost competitive.
Comrade Mary
The happiest goddamn man in the goddamn universe, right after the first walk on the moon.
Kristine
@danah gaz (fka gaz): No argument about the usefulness thanks to its physical properties. But there are other useful metals. I do tend to think that much of its worth is connected to its prettiness. It is the precioussssssss….
danah gaz (fka gaz)
@PurpleGirl: Personally I think that there are a number of other reasons that gold won’t stand as a backer of money these days. One of my concerns would be world supply. As economies scale, gold would become less realistic as a backer of currency. Even today, as Tom said, a dime of gold would be worth $120. I don’t think it’s farfetched to say that we’d have to cease using gold for industrial purposes (not to mention bling) to even begin to tackle that problem. It’s just not sustainable. So I’d say as far as your point, we’re already at a place where we don’t have enough gold to back our currency in any meaningful sense.
Disclaimer: I’m not an economist, and I did not sleep at a Holiday Inn last night.
Roger Moore
@mai naem:
He apparently felt it was unfair that he got the credit for being the first man on the moon, and that the whole program deserved the recognition. He actively shunned the spotlight and basically turned into a recluse to avoid being given credit he felt was undeserved.
RSA
The first comment on the Bloomberg article is from a libertarian:
My thought is yeah, but when the dollar was backed by gold in the U.S., the elderly lived in poverty, only about a third of women worked outside the house, and in some rural communities electricity and indoor plumbing were still luxuries. I guess what I see as the unfortunate past is viewed by some people as a desirable future.
danah gaz (fka gaz)
@Kristine: Definitely. However, I think scarcity itself may be a larger driver of value. Consider that we can now make the ultimate “shiny object” – diamonds – that are completely flawless (and so arguably superior to their natural counterparts) – however they are worth exactly fuck all (relatively speaking).
Anoniminous
@danah gaz (fka gaz):
Not wishing to cause a run on BrainBleach(c) I’ll refrain from quoting, I’ll merely observe her book “Introduction to Objectivist Epistemology” is page after page after page of jejune nonsense, Informal Logical errors, Formal Logical Fallacies, and ignorance of intellectual findings and developments since 1792.
ETA: I agree she fooled a lot of people; a saying of P. T. Barnum leaps to mind.
JPL
@Ann Rynd: Men like mirrors also.
I say base the economy on sand.
Doggie D
Franklin’s world was one of rapidly expanding resources (farmland, metals) onto which an expanding people would potentially benefit from an expanding currency base. Europe in the 1600-1700s had a metals-based currency and was undergoing hyper inflation, as the metals from Meso-Americans were won and moved to the Continent. Franklin’s arguments were made for an ethical people, who had the potential to make decisions for the good of the whole. He rightly lost the argument.
Today’s paper-money argument is a little different and devoid of ethics. It is only Logical for the Federal Reserve to be able to create wealth out of thin air, and transfer it to world bankers, who then distribute a percentage of it back to favored groups with interest, diluting the currency and imposing a net tax on all of those who are not a part of the club. Gasoline is $4. This practice, of course, cannot be challenged.
Or else Ezra Klein and Paul Krugman will call you names.
danah gaz (fka gaz)
@danah gaz (fka gaz): Speaking of that, I think we should just abandon all pretense and back our currency with African children.
“Hey buddy, can you break a 12 year old?, I need change for the bus”
Ann Rynd
@Anoniminous: She might have failed as a human being but there’s a candidate for VP of the United States who’s putting her ideas into the platform of the Republican Party. Aside from that her real value would be as difficult to determine as that of gold or “turtles all the way down.”
She did write inferior novels, however.
danah gaz (fka gaz)
@Doggie D: Ron Paul 2012!
/snark
Davis X. Machina
@Doggie D: The “Doggie” is short for dogma: a set of firm beliefs held by a group of people who expect other people to accept these beliefs without thinking about them.
mai naem
@Roger Moore: Well, that make me think even better about the guy. I just read his obituary. I guess the Moonwalk is to Ted Kennedy and Mary Jo Kopchne(sp?) what 9/11 was to Gary Condit and Chandra Levy.
I guess Ted’s going to thank Neil personally when he gets past the pearly gates.
Doggie D
Actually it is a sexual position.
jimmiraybob
RSA @ 94
The beauty of the Ayn Rand (Ryan) system is that we shouldn’t have any regard for these collateral damage. Rand bypassed this and created a new ethic justifying unfettered capitalism (so says Paul Ryan himself). The old and poor and hungry bring it onto themselves. That’s why they’re the moochers and looters of society. It’s not like the producers and their political allies did it to ’em. They just didn’t work hard enough or pray hard enough.
And by “beauty” I mean the ugliness and utilitarian depravity of having no empathy and no conscience and ultimately no responsibility for the others that fail.
Therefore, what you and I might see as the unfortunate past or future in terms of human suffering in the face of plenty is, by Randian and modern TeaBirchEvangelicalPublican standards, just an index of success for those who deserve success.
danah gaz (fka gaz)
@jimmiraybob: Setting aside Rand’s moral failures, who does she think is going to be left to buy the stuff that Galts of the world produce after a couple of generations of such a system? They can’t just sell yachts to each other (assuming they could even still build them)
schrodinger's cat
This is idiotic, the dollar won’t be the de facto US currency if they get their way.
Roger Moore
@danah gaz (fka gaz):
This is an inherent problem with commodity currency in any monetary economy. You have conflicting needs when choosing your commodity. First, there should be enough of it around to serve as the complete money supply. Second, there shouldn’t be so much more of it around that somebody could find a new supply and devalue the currency. Third, you should still be able to pull enough of it out of circulation for whatever it’s useful for to serve as currency without crashing the economy. There is no commodity that meets all three requirements, and there probably can’t be.
jimmiraybob
@Doggie D:
Won? I believe that the word that you’re looking for is stolen, while the Meso-Americans were being murdered.
danah gaz (fka gaz)
@Roger Moore: This precisely. Although (channeling my inner Jon Swift), I shall again propose African children as our new currency. They tend to weigh less than gold, as well.
Both Sides Do It
Fun fact: Leibniz was an advocate of fiat currency.
jimmiraybob
@danah gaz (fka gaz):
Well, there ya go. Tyranny of the details :)
Omnes Omnibus
@danah gaz (fka gaz): Why are you looking for reason, logical consistency, and/or concern with real world consequences in anything to to with Rand or her acolytes? DIY dentistry would be less painful.
danah gaz (fka gaz)
@Omnes Omnibus: heh. I also read “Atlas Shrugged” and “The Way Things Ought To Be”. I’m only reluctant to engage in DIY dentistry because I’m a bleeder.
Omnes Omnibus
@danah gaz (fka gaz): I never got more than 20 pages into AS before throwing it across the room. I never was a teenage Randian. Fucking horrible writing.
Applejinx
Some libertarian:
When you drank human milk, your life expectancy was eighty years. When you’re drinking cow’s milk now, your life expectancy is what, forty? You know what to do!
danah gaz (fka gaz)
@Omnes Omnibus: I have a high tolerance for pain. Also, I was a teenage cutter – never a rand fan – so my motivations probably stemmed more from that. ;)
Downpuppy
Just 2 random points, which may be repeats:
James Blish SF series, Cities in Flight; inclded a couple galactic depressions due to bad monetary regimes.
The policy is not just bad, the fact that the establishment hasn’t laughed it out of town is worse. Part of it may be due to the capture of George Mason & (almost) UVa by utter loons.
Rich (in name only) in Reno
I can’t help but think that when the Right Wing Apocalypse they pray for finally comes, all the Goldbugs are going to be mightily surprised when the “food creators” tell them that their gold is worthless and that if they’re hungry, to try eating gold.
Once the money-mad have passed on to oblivion, as “they have had their reward” here on earth, we will finally realize the Agrarian Paradise of Citizen Farmers envisioned by Jefferson and Payne.
Or maybe not. Never underestimate the ability of the American Public to totally screw something up, even the Apocalypse.
gene108
The gold coinage standard works, so long as you can convert large amounts of gold into precious stones for easier carriage.
I’ve dealt in the gold coinage standard, when I played D&D. I know the ins-and-outs. It can work.
Peter
When I was a child, one of the things that baffled me was the value of gold. I knew it was valuable – Richie Rich was always tripping over the stuff, after all – but I couldn’t puzzle out why. It’s rare, sure, but all I knew that it was used for was ornamentation. Surely something would have to be rare AND useful to be so valuable?
Now of course, I know that gold does have various industrial applications. But the notion that gold has inherent value, any more than any other commodity or a paper currency, still baffles me. It strikes me as downright religious.
Hob
@jimmiraybob: Don’t waste your time – that’s almost certainly Brick Oven Bill under a new name. The pseudo-historical gibberish, random capitalization, fantasies of oppression by our liberal blogger overlords, and smug jokes about genocide are dead giveaways.
Kristine
@danah gaz (fka gaz): They’re worth fuck-all thanks to human intervention including, if I recall the stories correctly, pressure from deBeers et al. The labs can only make certain sizes and grades, and not gem-quality stones. But I read that story years ago. No clue what they’re actually doing now.
Precious and semiprecious stones are interesting beasts. More and more are being fabricated in labs. The only gems worth anything are those with some known history behind them–crown jewels, etc. Everything else is borderline costume jewelry.
schrodinger's cat
@schrodinger’s cat: Oops I meant de-facto global currency.
Tim C.
Look, they aren’t going to do this. The GOP may be a lot of things that are awful, but this isn’t happening. Not even the Koch brothers want this. Ryan is just trying to woo a few Ron Paulers, and it probably wont even work that well. We can mock them for it, but I can’t even imagine them doing it for real. War with Iran? Sure. Destroying Social Security? Absolutely. Medicare? Toast. But as Meatloaf would say, “But I won’t do that.”
S. cerevisiae
@RaflW: How do you pay your weed dealer?
JGabriel
@Both Sides Do It:
Liebniz was a smart man. You can quote me on that.
.
Temporarily Max McGee (soon enough to be Andy K again)
@jimmiraybob:
Well, if you consider the natural spread of germs murder, maybe. Had the pre-Columbian natives of the Western Hemisphere had more immunity to Eastern Hemisphere diseases, there would have been no need to bring slave labor to the Western Hemisphere. And even if you take smallpox and measles out of the mix, if you believe that Pizzaro’s and Cortez’s small bands of conquistadors could have easily defeated the Inca and Aztecs without the help of huge groups of peoples subjugated by those dominant Western Hemisphere powers (and the same thing holds true for the English and French in the northern part of the Western Hemisphere), you’re really, really high.
Not that you’re being so wrong validates the main thrust of Doggie D’s conspiracy theory involving the cabal of bankers whose only desires are to systematically engorge themselves on his sovereign ass…Just sayin’ that you’re wrong, too.
jimmiraybob
@Temporarily Max McGee (soon enough to be Andy K again):
I wasn’t referring to accidental or intentional spreading of germs but, instead, to murder by the sword or whatever other mean was available and expedient.
Not wrong. It’s historical fact.
Thanks for playing though.
slippy
@trollhattan:
Imagine, if you can, the melee mode of any multiplayer FPS game. Twenty or thirty heavily-armed digital avatars, dying five or six times a minute.
On Topic: I can’t believe nobody has linked the XKCD money chart in reference to the goldbug stupidity.
Way down on the lower right hand side is the value of all the stuff sized in trillions that exist in the world. ALL THE GOLD EVER MINED does not even equal the US national debt. Not only is that insanely stupid and impractical for backing our currency with, it’s utterly impossible for making our currency with.
And let’s not get into the whole part how the US gov’t would ever get its hands on all that gold — absolute nut-fuck stupid craziness, there.
Nutella
@danah gaz (fka gaz):
You say that as if it would be a bad thing.
Randians would disagree.
Temporarily Max McGee (soon enough to be Andy K again)
@jimmiraybob:
Had they had to rely on the sword, they’d have been sent running back to their ships. The only real technological advantage they had was armor that couldn’t be pierced by arrows. What they did, quite simply, was unite pissed off factions of the Native Americans- pissed off because the first waves of disease had already hit ’em, and the leadership had clearly not appeased the gods- and played ’em off against those in power. After the battles were over, all of the natives got sick and died. Had those diseases not burned through the population so quickly and so fatally, the natives would have overwhelmed any invaders. There’s no fucking way that any European power of the time could have afforded to send a sufficiently large force to conquer this hemisphere. The Europeans would have been forced to trade fairly. The Spanish wouldn’t have been awash in gold and silver, so they wouldn’t have been able to finance the Holy League’s wars against the Turks, the Turkish fleet breaks out of the Mediterranean…The whole world looks different today. All due to microscopic organisms,
When the colonizing powers actually did get to that point where they could effectively use force, they didn’t have to use much relative to the previous military conquerors of Eurasia. Smallpox and measles had done all of the heavy lifting early in the process. From the 16th Century through the 19th, The ratio of deaths from disease to deaths from violence amongst natives of the Western Hemisphere was at least 10 to 1.
jimmiraybob
@Temporarily Max McGee (soon enough to be Andy K again):
Interesting hypothesis you have there. Have you thought about testing it with facts?