In early July 1944, delegates from 44 countries gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire. A three-week summit took place, at which a new system was agreed to regulate the international monetary and financial order after the Second World War.The U.S. was already the world’s commercial powerhouse, having eclipsed the British […]
When you type a website address into a browser, you might have noticed that the letters “http” appear at the front. “HTTP” stands for Hypertext Transfer Protocol. In typing a Web address, you are actually sending an HTTP command to transmit that website to you. Hypertext Transfer Protocol is the means by which information is […]
In 2012, money mandarins running the European Union chose stagnation over restructuring. Here’s a consequence of that choice: expectations for a self-sustaining economic recovery keep getting crushed.Two years ago, European Central Bank (ECB) chief Mario Draghi promised to do “whatever it takes” to hold the eurozone together. He bluffed nervous investors into believing in a […]
Here’s a fun fact: Although we all hate the U.S. dollar, as it continues to hemorrhage wealth, its foothold as the world’s reserve currency isn’t going to disappear overnight.A Russian gas deal with China won’t change that — as we’ll highlight below.But before we get to the nitty-gritty, let’s dive into a story that’s right […]
Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
“As the nation’s central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding […]
The Keynesian disaster recovery plan has been to lower rates, force people to take more risk in search of yield, and entice others to borrow and spend and, magically, more jobs will be created. If people won’t buy stocks, central banks will.Back in 2011, Ben Bernanke, when asked if QE2 was driving up stock prices, […]
According to the Bureau of Labor Statistics, consumer prices are rising at a 2.1% annual rate. This suggests to us that the current stock market boom will die with a bang, rather than a whimper.Fed economists say they don’t think inflation rates are rising. They think the most recent reading is a fluke. But why […]
Real progress happens through real people, ideas, and innovations. Not by legislation argued and debated in Congress. Right now, one of the most influential technologies is changing the way people do business. And reinventing the future in the process.
As the world gets more digital, people forget about the benefits of transacting in cash. And government officials know that.
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Every time Bitcoin crashes, it winds up at a price greater than it’s previous high. Yet the experts still call it a currency fad that will fade away. But a little over a year since it really took up, the digital currency is still going strong, and is once again seeing its price rise. But is there another reason why people are buying Bitcoins.
All paper currency has a shelf life. It could be 5 years or 500 years, but at some point, the value of any paper currency eventually reaches zero. That's why, for centuries, people have turned to one shiny metal to safeguard their personal store of wealth. And, as Jim Rickards explains, you still have that option. Read on...
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“So we have, indeed, had a disappointingly slow recovery, and our consistent expectations for a pickup in growth have been dashed over a number of years… And the labor market is behaving in some perplexing ways and showing patterns that are novel.”–Federal Reserve Chairperson Janet Yellen in a speech to the Economic Club of New […]
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Ask a D.C. insider what’s the best way to solve the debt crisis. Nine times out of ten, they’ll recommend taking on more debt. That’s how things operate in the Potomac swamp. Up is down, right is left, digging yourself into more debt is the best way to get out of it. But it wasn’t always like this. In fact, there used to be common sense when it came to the economy. So where did it all go wrong?
Just because you’re retired doesn’t mean you have to stop working. Especially now that you have all the time in the world to do what you really want. Entrepreneurs don’t only come out of Silicon Valley. They come from all walks of life, from all different ages. If you’re retired and want to stay active while you relax, then find out the steps you need to take in order to start, manage, and grow your next small business.
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The government will do whatever it takes to make sure it has enough of your money to fund itself. On the surface you might think that means enduring a grueling audit. But the IRS and the government is more than willing to ignore your privacy in the cold relentless pursuit of the money they think they deserve. As they get bigger and bigger every year, the smaller and smaller your paycheck becomes as they leach off it.
World War II might have dragged the country out of the Great Depression, but it did so at a great price. Central planning took center stage, and politicans and bureaucrats suddenly knew what was best for America, the economy, and your life. On top of that, they replaced the free market with a new economic system… Creditism.
Argentina is suffering the ravages of government debasement of the currency -- i.e., inflation, the process by which government pays for its ever-increasing debts and bills by simply printing more paper currency. The expanded money supply results in a lower value of everyone’s money, which is reflected in the rising prices of the things that money buys.
Politicians — elected officials — are street smart rather than book smart.
If you care about influencing government policy it helps to know how they think.
Forbes contributor Nathan Lewis argues that:
“Too much is done today on the oral tradition. That is, literally, what it is. In this post-Gutenberg age, we have some better alternatives.
“Thus, we need what I call the ‘shelf of books,’ from different authors. It doesn’t have to be a big shelf. About twelve good books, recently written, would be enough.
“They can’t be old books and they can’t be books filled with economic fallacy. …
“The American Principles Project, which I call the ‘Tea Party’s think tank,’ has just released two white papers about monetary reform…
“Lewis Lehrman has just finished his most recent book on the topic, which was available in short-format form last year. That makes two books on our shelf. Great.
“I hear that George Gilder, who released the influential Wealth and Poverty in 1981, has gained a growing appreciation for the importance of monetary reform. Maybe Gilder will put his excellent research and communication skills to work and produce a new work on the topic.”
Nathan Lewis and I agree that more books will be useful to the restoration of the gold standard.
We get there, however, through different paths of thought.
This columnist, unlike Nathan Lewis, spends a great deal of time on Capitol Hill talking with legislators and their key aides. Few legislators, or legislative aides, have the luxury of reading many books. This is not due to a lack of intellect. Most elected officials and their advisors are very smart.
Nor is this due to a lack of intellectual curiosity. Those who serve in the legislative branch tend to be imbued with practical curiosity.
When time permits they love to read, and read sophisticated works. The editor of one of most influential magazines in Washington privately reported, about a year ago, encountering Rep. Kevin Brady (R-TX), chairman of the Congressional Joint Economic Committee, reading Lewis E. Lehrman’s The True Gold Standard on the Acela train from DC to New York City.
Yet because legislators are inundated with inputs — from constituents, the media, trade associations, leadership, colleagues, donors and others — their decision-making primarily is based on a sophisticated process known as “heuristics.” Wikipedia defines heuristics as:
“Where the exhaustive search is impractical, heuristic methods are used to speed up the process of finding a satisfactory solution via mental shortcuts to ease the cognitive load of making a decision. Examples of this method include using a rule of thumb, an educated guess, an intuitive judgment, stereotyping, or common sense.”
Heuristics is a process we all use. We may not always quite know the name of a candidate. Yet we recognize her party affiliation… and vote accordingly. That’s heuristics.
Legislators, by necessity, rely on this even more heavily than most of us. It serves them well. They can with good confidence rely, for the most part, on the refined judgment of trusted authorities. What Lewis dismisses as “the oral tradition” is a manifestation of a sophisticated reliance on heuristics.
Nevertheless, Lewis’s call for a “small shelf of books” is well founded. Books give their writers, and readers, a chance to think through issues in depth. They add a measure of prestige and authority to their authors. When a Congressperson knows that the source of a legislative proposal derives from a book both the author and the idea gain — heuristically — some added credibility.
Credibility matters. This is a sad era where America understandably feels (because it was) lied to by its president. Yet the gold standard of both politics and governance is credibility. Voters, on balance, are not persistently credulous.
Nathan Lewis, PI (Public Intellectual) publicly yearns — as do all public intellectuals — for our legislators to decide by Deep Thought. The evidence argues that policy decisions almost exclusively are made based on how sensible — as in common sense — policy recommendations appear and how credible the officials deem the source. This is an exercise in heuristics, not “oral tradition.”
That does not vitiate Lewis’s fundamental desire for a “shelf of books.” It simply shifts the nature of the influence of books among official policy makers. For example, books help persuade other intellectuals, which helps to persuade policy institutes, which help to persuade officials.
2013 was the richest year in recent memory for the publication of books about the gold standard. Lest the gold standard seem like an unreachable goal, let it be noted that Paul Krugman, in his Dec. 22, 2013 New York Times column observes that “What’s really happening [in the policy discourse] is a determined march to the days when money meant stuff you could jingle in your purse.”
“Stuff you could jingle” of course is Krugman’s merry anathema — counterfactual, as is standard on this subject with Krugman — for the gold standard.
But Prof. Krugman is not wrong about the “determined march” — a march that clearly is gaining real traction. This is very much to Krugman’s dismay. Alluding to the fountainhead of faith-based economics, John Maynard Keynes, Krugman calls the gold standard, which he clearly does not comprehend, “barbarism.”
The march continues, determined. There is nothing remotely barbaric about the classical gold standard as this year’s crop of books elegantly demonstrates. Thus a valuable additional pillar of support for the gold standard is being secured.
Nathan Lewis himself has contributed one of these books, Gold: The Monetary Polaris, called by John Tamny “a monetary policy masterpiece of a book that everyone should read.” Tamny concludes: “This is easily the most important book of 2013, arguably the most important economics book in a long time, and the best book on money that’s yet been written.” This columnist considers Gold: The Monetary Polaris an invaluable resource.
Of even greater value, in this columnist’s view, for 2013 were Constitutional Money: A Review of the Supreme Court’s Monetary Decisions by Richard Timberlake, Money, Gold, and History by Lewis E. Lehrman, and Knowledge and Power by George Gilder — each of which were the subject of 2013 presentations at the Cato Institute. Cato increasingly and justifiably is an influential voice for economic policy on Capitol Hill.
The authors of these works have attained a certain iconic status: Timberlake, at age 91, the dean of free banking economists, has created an indispensable classic in constitutional monetary studies, one published by Cambridge University Press. Lehrman (with the Institute which he founded and chairs this writer has a professional association), as the Reagan Gold Commissioner and champion of a modern classical gold standard. And Gilder, as the living author most cited in speeches by President Reagan.
This columnist reviewed Gilder’s Knowledge and Power — praising its powerful contribution to the discourse of bringing information theory to bear on the gold standard; and reported on the Cato debut of Money, Gold, and History — broadcast by C-SPAN — as “a Velvet Underground Event.”
Money, Gold, and History is a worthy companion volume to Lehrman’s immediately preceding work, The True Gold Standard welcomed by Nathan Lewis, its author praised in an Amazon review by iconic financier Barton Biggs as “the most profound monetary thinker of our time.”
In addition, Dr. Judy Shelton, of Atlas Economic Research Foundation, has provided a splendid new edition of Jefferson’s Notes on the Establishment of A Monetary Unit, both in facsimile and text, with a brilliant introduction by the author herself. The text of Jefferson’s notes previously was readily available only in virtual format from the invaluable archive maintained by Liberty Fund. Dr. Shelton’s introduction observes:
“In the context of Jefferson’s life and times, it’s important to understand that the value of money was scarcely distinguishable from the money itself. Gold and silver coins provided the common media of exchange: their worth was largely intrinsic, subject primarily to the quantity and purity of the metal they contained. … Jefferson deferentially refers to the assays of foreign coins performed by Sir Isaac Newton in 1717 (when Newton was Master of the Royal Mint)…. As an aside, the fact that Jefferson mentions Newton not just once, but four times, in this fairly short document gives some indication of the esteem he held for the renowned scientist. In a 1789 letter, Jefferson praised Francis Bacon, John Locke, and Isaac Newton as ‘the three greatest men that have ever lived, without exception’ and kept portraits of them at Monticello…”
Last year also saw the first readily available English language edition, published by Laissez Faire Books, of Copernicus’s Essay on Money translated from the Latin by classicist Prof. Gerald Malsbary, co-edited by this columnist and by Charles Kadlec. Its introduction observes:
“The classical gold standard has a more profound pedigree than many know.
“It is fairly widely understood that the classical gold standard originally was designed, in 1717, by Sir Isaac Newton, then master of the mint of Great Britain. It lasted for two centuries, and it is an irony of history that John Law’s notorious experiment with paper money, which ruined his investors, France, and himself and lasted but three years, was initiated in the same year.
“The fact of Newton’s role as architect alone would provide the gold standard with a most dignified intellectual provenance. Now comes a new, meticulously researched, and lucidly devised translation by classicist Gerald Malsbary ….
“Through this translation, scholars, intellectuals, and policy makers readily will be able to discern that the fundamental intellectual groundwork for the classical gold standard was laid by another scientific icon, Nicolas Copernicus. Yes, Copernicus, the very same who placed the sun in the center of the solar system.
“Prof. Malsbary’s translation shows Copernicus’s widely overlooked tract On the Minting of Money as no more dated than heliocentricity, contemporary and as lucid as anything ever written on monetary policy.”
Good books. Still, the most perceptive statement on the logic of lawmaking on record may be that by Oliver Wendell Holmes, Jr. His famous lecture at the Lowell Institute, published in his classic work The Common Law, states:
“The life of the law has not been logic: it has been experience. The felt necessities of the time, the prevalent moral and political theories, intuitions of public policy, avowed or unconscious, even the prejudices which judges share with their fellow-men, have had a good deal more to do than the syllogism in determining the rules by which men should be governed. The law embodies the story of a nation’s development through many centuries, and it cannot be dealt with as if it contained only the axioms and corollaries of a book of mathematics.”
“The life of the law has not been logic: it has been experience.” This is, of course, a more eloquent way of saying that politicians — our legislators — our lawmakers — and their aides primarily, and justifiably, rely upon heuristics. Street smarts not book smarts.
Meanwhile, all to the good, Nathan Lewis’s desire for “About twelve good books, recently written” — even if one excludes Jefferson and Copernicus as “not recently written” — is well under way to fulfillment. The gold standard makes street sense and book sense both.
– Ralph Benko
This article originally appeared here on Forbes.com.