THE STUDY JANUARY 18, 2012
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Another day, another weird idea from Newt Gingrich. Today’s special: The U.S. should consider a return to the gold standard. Gingrich, speaking at a forum in South Carolina (a place that really seems to bring out the crazy in people), admonished the Federal Reserve and declared: “Hard money is a discipline. It means you can’t inflate away your difficulties.” Would a return to the gold standard stop inflation?
Economists, who overwhelmingly oppose returning to the gold standard, say no. Harvard’s Richard Cooper, in a 1982 paper, noted that much goldbuggery comes from “those who still attach a monetary significance to gold and do not fully comprehend that, ultimately, money is a social convention.” Cooper’s argument addresses Gingrich’s contention, noting that “interest in reviving gold lies primarily in a desire to eliminate inflation.” But on that point, Cooper writes, “the historical gold standard offers little comfort.” In fact, price instability was common in the heyday of the gold standard. Attempts to stop inflation by fixing the dollar price of gold fail because “the relative price between gold and other commodities […] is variable over time.” Of course, half-baked nonsense is hardly uncommon with Newt—when it comes to ideas, he’s the anti-Midas.
4 comments
So now Newt is a bigger bigot than Perry, he's going to be a bigger Gold-bug than Ron Paul, and he's claiming to be a bigger Conservative than Romney. Now all he has to do is claim he's a bigger Christian than Santorum and he'll have the nomination sewed up. Assuming anybody believes him. I suspect there's a large credibility gap.
- AllanL5
January 18, 2012 at 4:16pm
This is a shameless attempt to steal , or co-opt, Ron Paul's favorite idea, is it not? Funny, but I've never heard Newt say anything about the gold standard before. Did this just suddenly occur to him? Like a lot of Newt's ideas, it seems very much like a spontaneous, half-baked, flight of whimsy masqueraging as something born of deep thought.
- Haole45
January 19, 2012 at 4:01pm
"South Carolina is too small for a republic and too large for an insane asylum." James L. Petigru Anti-secessionist South Carolina Attorney 1860
- gurwia
January 19, 2012 at 7:16pm
Methinks that Newt is just throwing this crap out there to co-opt the casual Ron Paul voter (i.e., the one who generally likes the notion of "sound money" and dislikes inflation and big government programs, but who really has no clue on how the gold standard might work in practice). He doesn't actually mean anything by this, certainly not when it comes to explaining how he plans to return to the gold standard or something like that when he is elected President. Until he makes this an actual talking point and incorporates it into his policy papers, I think we can treat Newt's new-found gold buggery as just more campaign hot air. On the other hand, it would be really interesting to see if he pushes this point in a prolonged primary campaign and is forced to defend it against Romney or, worse, Obama.
- wildboy
January 23, 2012 at 10:36am