The principal author of our current economic ills doesn’t seem to know history any better than monetary policy.
When the Obama administration announced that it was planning to replace Alexander Hamilton on the ten dollar bill with an unspecified woman, former Fed Chairman Ben Bernanke leapt into the fray. He said he was “appalled” by the decision since Hamilton “was without doubt the best and most foresighted economic policy maker in US history.” He proposed that Andrew Jackson be removed from the twenty dollar bill instead.
A New York Sun editorial on June 23 dryly noted that Hamilton was the author of the Coinage Act of 1792, which represents the very sound money that Bernanke has done everything in his power to destroy. The Sun, however, tempered its criticism with the following comment: “We understand that there are serious persons who reckon Hamilton, who was notoriously partial to federal power, would not have opposed the idea of fiat paper money. This point has been marked for us by no less a scholar than the journalist and historian Myron Magnet…. Let us stipulate Mr. Magnet’s point.”
Let us not stipulate Magnet’s point, because it is incorrect. Hamilton condemned paper money not backed by gold or silver as an evil. Here is what Hamilton actually said: “The emitting of paper money by the authority of Government is wisely prohibited….Though paper emissions, under a general authority, might have some advantage…, yet they are of a nature so liable to abuse—and it may even be affirmed, so certain of being abused—that the wisdom of the Government will be shown in never trusting itself with the use of so seducing and dangerous an expedient…. The stamping of paper is an operation so much easier than the laying of taxes, that a government, in the practice of paper emissions, would rarely fail…to indulge itself too far in the employment of that resource…even to [ the point of creating]…an absolute bubble.” [ Report to the House of Representatives, Dec 13, 1790]
HERE are the companies which are part of the U.S. Coalition for TPP.
HERE are the amounts the companies gave to members of the US Senate in the run up to the ultimate vote.
As governor of Wisconsin Scott Walker has seen more than his share of challenges for the period he’s held the office. Through elections, recalls, an army of state workers invading the state capital and demanding his head, he’s stayed pretty cool. He also won. It appears that he knows how to make decisions and how to see things through. But he has no national economic experience.
What does he believe? What would he do? We have a few clues.
One of them is which economic thinkers Walker has been talking with.
Rumor has it John B. Taylor, prominent economist at Stamford and the Hoover Institution and the governor have been sharing ideas.
What then do we know about Taylor?
Debt can be a very valuable tool when used wisely and with caution. One has to remember however what can happen if one over leverages oneself. You and I are not Goldman Sachs. We can’t ask the government for a bailout.
Oh Mr. Stockman, you don’t mince words. And that’s why we like you so.
Indeed the central planners are at the helm pushing the world economic ship into deeper and blacker waters. Looking for something, anything, a way out of this 0% interest rate bizarro world.
If one wants to be an economics superstar there seem to be 4 routes. 1. Win a Nobel Prize. 2. Write a book which is widely read by politicians and the intelligentsia. 3. Just produce excellent work, toil in obscurity, and then have your ideas championed by someone or group with the means to champion someone. 4. Become a presidential advisor.
I am sure that there are other routes too. Becoming a TV personality comes to mind but I can’t think of any economists who have or have had shows of note.
One thing is for sure, presidential candidates, and presidents need economists. Who a candidate partners with is a hugely important decision. To a greater or lesser degree the chosen economic advisor(s) sets the tone for the bread and butter part of any campaign.
Ron Paul calls out the Plunge Protection Team on CNBC. I don’t think I’ve ever heard it mentioned on financial television. Seriously anyway.
And boy is he right. There is an assumption that the Fed will never let stocks (and other assets) revert to real levels.
The thing is the Fed for all its power is still subject to the laws of thermodynamics, just like the rest of us. That is, even the mighty central bank will feel the sting of its hubris.
Of course so will the rest of the planet. Which let me tell you is a real bummer.
In 1937 after years of a meager “recovery” the economy slumped again as artificial economic props were taken away. The Great Depression was born anew. 4 years later we were in a global war.
Let’s see, depression, then mediocre growth underpinned by artificial economic stimulants, sounds pretty familiar.
This is what happens when interest rates are set by a politburo instead of by the market.
You know these politicians all seem to get rich after they come to Washington DC. How does that happen?
If you want to see something crazy check out Diane Feinstein and some of the stuff she’s got going on.
It should be noted that Texas was negotiated into the Union.
I did not grow up with money. But I did work in finance for years and I have known a number of people with significant wealth. I also live in an old money town, Charlottesville, Virginia.
There is an adage about significant wealth which I think holds generally true and that is that “old money” is smaller than “new money.”
Often with older money there is some patriarch a few generations ago who made a pile of cash in some endeavor, rubber, banking, textiles, whatever. And sure, properly taken care of this wealth should grow from generation to generation. And this sometimes happens.
But never underestimate the destructive ability of an idiot son or grandson or grandsons given too much responsibility and too much money. Over time fortunes very often erode. Not always, but often. And they are always split up through the generations.
Of course this assumes a capitalist, or close to capitalist system, not a crony capitalist one like we have now.
With regard to government there is no issue with revenue, except that the collectors take too much of it. We are taxed far far beyond what is reasonable. The only people who likely think that we are not are either those who are not taxed (for the most part), those for whom taxation has little impact on their lifestyle, or those for whom taxes are a circular flow – government employees.
How much better would your life be if you could keep the money which goes for just your income tax? Assuming a defense, a court system, a system of law enforcement, and maybe a patent system are funded, how much better would our lives be without the crushing weight of everything else the government does? Seriously, your family’s life would likely be much BETTER.
For the most part your taxes go to support corporate welfare and a government dependent class (government workers, contractors, welfare). Why shouldn’t that money instead go to investment and retirement accounts and paying for the kid’s college and building businesses?
Why? Because there are powerful people who get rich off of the taxes taken from your family. It is nearly as simple as that.
Sometimes the universe is weird.
Live by the all pervasive state, die by it.
Capital controls are already a reality in some places on the western periphery. There is talk among some economists about abolishing cash. How long until the Federal Reserve notes in your account are there permanently or semi-permanently? You already can’t take out more that $10,000 without your bank alerting the Feds.
The question I have is, is it your money or not? (I know the answer, but I still ask the question.)