Originally posted on Tuesday, February 7th, 2012
Why tie to gold? why not 1982 Bordeaux? So asks Prof. Richard Thaler.
As Ezra Klein, one of the Washington Post’s resident propagandists shows cognizance in Wonkblog: the University of Chicago remains hostile to the gold standard.
As breaking news, this is right up there with “The Pope is Roman Catholic.”
As propaganda, it is … rather a disappointment.
The University of Chicago was the base of the beloved Nobel laureate Milton Friedman, who relentlessly opposed the gold standard and championed monetarism — at least until toward the very end of his life where he in a 2003 interview with the FT distanced himself rather dramatically from his monetarist legacy:
William Keegan, in the UK Guardian:
The economic quote of the month – and probably the decade – is that Milton Friedman now admits: ‘The use of quantity of money as a target has not been a success.’ He added: ‘I’m not sure I would as of today push it as hard as I once did.’ (FT, 7 June 2003).
But such is the inertia of academe that the news may not have fully penetrated, at least not in Friedman’s old redoubt.
The University of Chicago’s Booth School of Business conducts an “Initiative on Global Markets,” which it styles itself a thought leader on global markets:
The massive global movements of capital, products, and talent in the modern economy have fundamentally changed the nature of business in the 21st century. They have also generated confusion among policymakers and the public.
Chicago Booth will continue our role as thought leader on how these markets work, their effects, and the way they interact with policies and institutions.
In the IGM Forum of January 12th, ChicagoBooth polled 40 economists, some quite distinguished, and reported that 100% either disagreed, or strongly disagreed, with the proposition that “If the US replaced its discretionary monetary policy regime with a gold standard, defining a “dollar” as a specific number of ounces of gold, the price-stability and employment outcomes would be better for the average American.”
This is, of course, entirely contrary to the empirical data adduced in December by the Bank of England (as reported here, and at Bloomberg.com, Forbes.com, Pravda.ru, and most recently at DailyFinance.comshowing, and decisively, that even the dilute form of the gold standard under Bretton Woods unequivocally shows that superior price stability and employment outcomes were better for the average American (and the price-stability under the classical gold standard was undeniably better still.)
But why let a few inconvenient facts, even reported by so imposing an authority as the Bank of England, stand in the way of a good macroeconomic consensus?
But Mr. Klein? As propaganda, as a Washington Post reader I say we, your readers, deserve much better quality propaganda than you provided us here.
Bravo for delightful wit to Richard Thaler, Ralph and Dorothy Keller Distinguished Service Professor of Behavioral Science and Economics, Director of the Center for Decision Research at the University of Chicago, Co-director of the NBER Project on Behavioral Research (1992–present), and, apparently, oenophile, who, in reply to the ChicagoBooth poll asked:
Why tie to gold? why not 1982 Bordeaux?
A 1982 Bordeaux standard is a proposition to which we here at The Gold Standard Now gladly will raise a toast … if a reader will but furnish us with a bottle!
(At $3,000 per bottle it presents as a standard more suitable to members of the 1% — Ralph and Dorothy Keller Distinguished Service Professor types — rather than pixel-stained wretches like our editorial team, 99%ers all, for whom the more proletarian gold will have to serve.)
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