It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Given how poorly states like California and Illinois have funded the pension funds for their own employees, one would think that this would stop dead in its tracks any plan to have the government assist in managing private sector funds too. The spate of recent activity, however, suggests otherwise.
The financial world is plodding along like a drunken sailor avoiding debt collectors by keeping no cash in his wallet. It’s not the kind of calm that’s going to last or end well. But the storm will have to wait until after the Olympics.What a game! We’ve never watched ice hockey closely before. But watching […]
“When they come for my gun, they will have to pry it out of my cold, dead hands,” is a common refrain I often hear from the Neo-Cons when there is a threat, credible or otherwise, that the U.S. government is going to take their firearms.And, when I hear this crazy talk, I agree with […]
Last year was quite the year for Bitcoin. We’ve seen exponential growth in Bitcoin’s exchange rate and extensive coverage in the media. Another phenomenon we have witnessed is the proliferation of alternative cryptocurrencies, five of which we’ve provided below.What all of these cryptocurrencies have in common is that they rely on a decentralized network to […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Amidst all the revelations about how the American people, many of whom are absolutely convinced they live in a free society, have their telephone calls, emails, website visits, and who knows what else under surveillance by their own government, let’s not forget the massive infringements on financial privacy that have gone on for decades.Consider, for […]
Image: ShutterstockBitInstant CEO Charlie Shrem, along with alleged co-conspirator Robert Faiella, was arrested by federal authorities last week for allegedly laundering more than $1 million worth of Bitcoins. This is a tiny amount compared to the largest drug-and-terrorism money laundering case ever. Yet when British bank HSBC was found guilty in 2012 of laundering billions, […]
The exercise had an awesome name, inspired by the movies: “Quantum Dawn 2.”On July 18, scads of U.S. banks, stock exchanges and government agencies took part in a digital fire drill — a practice run in the event all of Wall Street came under massive cyberattack.This isn’t the first time banks have come under an […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
So you’ve maneuvered the Obamacare website, plugged in your top-secret information and found out how much you are forced to pay to avoid a fine.And for some of you, it turns out you qualify for a government subsidy — making the premium sound like a bargain. But signing on that line to accept the government’s […]
The Largest Company in History:“The United States Corporation of Government (USCOG)”I follow global social and commercial networks, looking for entrepreneurial opportunities.Innovation surges when industry and government models change. Buggy whips. Landline phones. Railroads. The Soviet Union. Apartheid South Africa. All marked social and commercial innovation, both bad and good.We are witnessing a new form of […]
We’d like to give the banks in Australia some credit. They’ve finally gone and done it. They have caught up with 1960s technology. They’ve figured out how to use PIN numbers.How to only use PIN numbers, that is. They’re considering scrapping signatures on credit cards to cut down on fraud. Apparently, having to verify your […]
We put in a good-citizen call to the SEC the other day.“There’s a massive scheme to manipulate stock prices,” we told the friendly agent.“I have to tell you that your call is being monitored so that we can better serve the public,” he replied.“Oh, don’t worry about that. The NSA is tapping our call anyway.”“Are […]
Bitcoins are largely considered digital currency (or “crypto currency”) so you’d expect it to be treated like currency on a retail web site. But the Internal Revenue Service might not think so.
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 […]
Bitcoin has been making headlines for months now. Extreme price fluctuations have sparked a vigorous debate: Is it a currency or a scam? Is Bitcoin viable in the long-term, or are we witnessing a bubble waiting to burst?The answers to these questions are simple: Yes, Bitcoin is a currency, but we cannot know if it […]
The Silk Road was an undercover website where you could buy or sell illegal goods — drugs mainly. I believe passports were changing hands for about $6,000, and I understand weapons were also sold, but that was ceased in response to the spate of shootings in the U.S. over the summer. The essence of the […]
The market has selected different things as money throughout history. Some of these items have served as money in isolated places for specific periods of time — for instance, cigarettes in prisoner-of-war camps. Cigarettes continue to be a currency in prisons if allowed, but if not, according to Wikipedia, “postage stamps have become a more […]
[Ed. Note: This article originally published on Jan. 24, 2013]Stocks up. Gold down. Bitcoin… waaay up.The S&P 500 busted through the 1,500 mark this morning. Stocks haven’t been this expensive since 2007… right before they got a whole lot cheaper… for a whole lot longer. Gold, meanwhile, dipped a tad. This, despite central bankers of […]
Now, this is sheer entertainment. The Chicago branch of the Federal Reserve has addressed the great monetary question of our day. A researcher has taken a detailed look at the prospects for market-based crypto-currency, with a special focus on Bitcoin. It concludes that Bitcoin is not a viable replacement for the dollar. The report includes […]
The standard version of how money came to be goes like this: First, there was barter. (A handful of nails for a pint of ale!) Then, along came various forms of money. An evolutionary derby eventually crowned gold and silver as the supreme money. And finally, credit (or debt) was born. This is the apex […]
2013 represents another turning point in the demise of the American Empire. If you view it in economic (rather than ethical or moral) terms, the high water mark of Empire was probably in the late 1990s.But the Internet bubble and bust marked an important turning point. It coincided with the birth of the euro, a […]
It was a wild ride last week in the world of the Deep Web, that section of the Internet that requires special tools to access. The feds took down the site called Silk Road and claim to have arrested its founder and administrator. The news streams were filled with lurid tales of derring-do in this […]
My community in the Deep South prides itself on friendship, community feeling, and an overall happy spirit. So it was a bit strange for all of this to be utterly smashed and obliterated in the course of a few calamitous weeks in which friend turned against friend, colleagues became antagonists and enemies, and families were […]
A new assessment of state pension obligations suggests the problem is even worse than it already appears.How much worse?EMPTY COOKIE JAR: Pension liabilities are worse than many states’ official figures indicate.Using a more conservative method of accounting for financial gains in the marketplace, there is a $4.1 trillion gap between assets and liabilities — known […]
I dreamed I saw Bernard von NotHaus, alive as you or me.Said I, “But Bernard, you’ve been jailed two years.”“I never was,” said he.Bernard has been the called the Rosa Parks of the alternative money movement. More than 10 years ago, he had this idea that he would make his own money — not the […]
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.