Last Wednesday, Occupy Wall Street, known at Twitter as #OWS, surged, thanks to a boost from MoveOn.org, to 15,000 souls. That same day, former White House Green Jobs Czar Van Jones rallied hundreds at the Capitol. Smaller demonstrations have been reported in 50 cities.
Also on Wednesday the Heritage Foundation commenced an effort to tackle the underlying cause of the uneasiness manifesting in the streets of America, both Wall and Main, and the world. If the populist left and the populist right align, as they well may, we may be on the cusp of a Constitutional Realignment, or, stated plainly: really throwing the bums out.
One of the protesters’ most clearly defined complaints is wealth inequality. Wealth inequality is described at length by then Federal Reserve Bank President (now Board Vice Chairman) Janet Yellen and, more recently by former President Bill Clinton.
Keynes prophesied in The Economic Consequences of the Peace something very much like #OWS (and the whole world of protests) and addressed the underlying cause of the resentment:
Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. … By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred …. [Emphasis added.]
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
Keynes anticipated the dynamic we witness. Although Keynes was (on and off) opposed to the gold standard of his day, Lord Robert Skidelsky, his definitive biographer, astutely noted in the Financial Times that “Keynes’s famous dismissal of the gold standard as a “barbarous relic” does not quite capture his opinion of the metal, which he thought would be useful as a constitutional monarch but disastrous as a despot.” Bravo to Heritage for being that one in a million able to diagnose.
More lead-footed “Keynesian” dogmatists than Skidelsky are horrified that the right is rallying to monetary reform and, especially, to the gold standard. TheWashington Post’s Steve Pearlstein, The New York Times’ Paul Krugman, ThinkProgress’ Matt Yglesias and Marie Diamond, The Washington Monthly‘s Steve Benen and Michael O’Hare and The Roosevelt Institute’s Mike Konczal, Prof. Barry Eichengreen and Thomas Frank all have noted (with alarm), that, in the words of Krugman, “Gold bugs have taken over the GOP.”
Reagan, from Heaven, must be cheering on his fellow gold bugs’ takeover!
And #OWS is by no means an isolated event. On Sept. 28, the New York Times devoted more than half of its front page, above the fold, to an article datelined Madrid, titled “As Scorn for Vote Grows, Protests Surge Around the Globe: Many Are Driven by Contempt of Political Class.” Contempt of the political class? Sounds like … the Tea Party Patriots…. Welcome to the party, #OWSers!
Center-right and libertarian monetary policy conferences are beginning to come at a blizzard pace. Over the course of just this autumn at least six especially notable ones: The Utah Monetary Summit (with international attendees) coordinated by the potent Larry Hilton and supported by the American Principles Project (with which this writer is professionally associated); Cato; Atlas Foundation, James Grant, and the granddaddy of monetary conferences, The Committee for Monetary Research and Education.
And Heritage. Heritage Foundation is, perhaps universally, acknowledged as, well, “the gold standard” of policy institutes. And the very same day as #OWS crested — and Van Jones stormed Capitol Hill — Heritage broke its long silence on monetary policy. It sponsored a “Conference on a Stable Dollar: Why We Need It and How to Achieve It.” While the event was studiedly nonpolitical the two congressional candidates in the audience, Daria Novakand Anna Little, both firmly declared they were adding the gold standard to their platforms.
Heritage’s gravitas, and the fact that so many intellectual and policy heavyweights presented — to list just those with doctorates, the president of Heritage, Dr. Edwin J. Feulner, Dr. Brian Domitrovic, Dr. Lawrence Lindsey, Dr. Judy Shelton, Dr. Steve Hanke, Dr. Lawrence White and Dr. Jerry Jordan; to name the political and policy heavyweights, the Honorable J. William Middendorf, Steve Forbes, and Lewis E. Lehrman — gave this conference an extraordinary impact. The “economic consequences of the conference” are resounding still and may resound for decades.
Heritage proceeded with impeccable neutrality. Gold was not even referenced in the conference literature. Yet … “Stuart Varney, a Fox News host and moderator of the panel, asked the audience to raise their hands if they thought that gold should be part of some sort of monetary reform. Nearly the entire audience of wonks, academics, college students, and hedge fund managers raised their hands,”observed FrumForum reporter Noah Kristula-Green.
Former presidential candidate Steve Forbes, who presented the closing luncheon address, is a greatly respected voice. He famouslyhas predicted that America will return to the gold standard within five years. Forbes says the issue of “whether” we should do so is resolved. The issue, now, is “how.” Forbes’ call to action imparted a certain urgency to the proceedings.
Astute suggestions on how to move forward were provided by Dr. Shelton and several others. The most comprehensive prescription was that contained in the keynote by Lewis E. Lehrman, chairman of the Lehrman Insitute (with which this writer is professionally associated), and Reagan Gold Commissioner, fresh from a private discussion on the gold standard with a well-respected U.S. Senator. Lehrman’s keynote drew on his unique status as the only living protégé of French savant Jacques Rueff and upon over four decades of erudite engagement with monetary policy. Seth Lipsky in The New York Sun broke the scoop:
The first step … would be for America to announce the “unilateral resumption of the gold monetary standard” at “a date certain” … “defined by law as a certain weight unit of gold….” … Step two in the Lehrman Plan would be the minting by the Treasury and authorized private mints of what Mr. Lehrman calls “legal tender gold coin in appropriate denominations, free of any and all taxation.”
Lipsky sketches it out succinctly. The Plan meticulously is set forth at length in Lehrman’s new book The True Gold Standard: A Monetary Reform Plan Without Official Reserve Currencies, How We Get from Here to There. James Grant, author and editor, observes of this book: “The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman, she has finally found him.”
No contortions are needed to cross Keynes’s bridge between the profiteer-hating #OWS and the sober reformers gathered in monetary conclave by Heritage Foundation. The official website of Occupy Wall Street contains an entire forum dedicated to the gold standard. While by no means unanimous (please read it, and comment on it, here), a theme emerges that elegantly is summarized by one of the activist/commentators there: “Gold and silver. Been honest money since the dawn of time. The only money that’s ever worked….”
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