Originally posted on Tuesday, June 11th, 2013
The February 27, 2012 issue of The New Yorker provided an extensive profile of Rep. Ron Paul as presidential candidate: “The Party Crasher.”
the Honorable Ron Paul, photo courtesy of Wikipedia
Its author, Kelefa Sanneh, provides a telling vignette on why Dr. Paul entered politics:
In 1971, when President Richard Nixon announced that American dollars would no longer be redeemable for gold, Paul saw disaster, and when he ran out of friends and family members and patients to warn, he became a political candidate, which gave him an excuse to warn strangers. For Austrian economists, the appeal of gold is obvious: it is a precious metal that has been precious for a long time, which makes it relatively immune to government manipulation. As for Paul, talking about gold is a way to talk about inflation, which tends to inspire a visceral reaction in voters. Our hard-earned money decays a little bit every day, just as we do. Most orthodox economists have concluded that eternal inflation isn’t necessarily harmful, as long as it can be kept mild. (They disagree, of course, on how, or even if, this can be done.) And while some of them might prefer the gold standard to our current system, few would want to risk the potentially ruinous transition away from fiat currency. Even so, there is something seductive about Paul’s vision of a gold-pegged dollar, holding its value across the centuries–glittering instead of moldering. (p. 30)
The transition away from fiat currency is not, inherently, “potentially ruinous,” and a completely safe protocol for making such a transition is described in meticulous detail in The True Gold Standard: A Monetary Reform Plan Without Official Reserve Currencies by Lehrman Institute founder and chairman Lewis E. Lehrman. Fear of transition issues is rooted, in part, in the blunder made by Churchill, when Britain’s Chancellor of the Exchequer in 1925, in returning the United Kingdom to the gold standard at pre-war parity (and the ensuing sharp contraction).
Properly understood and executed the implementation of the classical gold standard is a recipe for turbocharged equitable prosperity. It is the antidote to the slow-motion disaster in which we are mired: 12 years (and counting) of utter economic stagnation.
Long live Dr. Ron Paul!
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