On Wednesday, the world woke up to the Drudge Report featuring, as its banner headline, Steve Forbes, the CEO, editor, and former presidential candidate, predicting a U.S. gold standard within five years. And as liberal blogger Mike Konczal wrote last month: "Conservatives are . . . rallying around the gold standard wing of their party."
Conservatives (among others) who are sickened by high unemployment and a runaway federal government should cheer the growing support for restoring the gold standard. But what's behind the groundswell of support for the gold standard, and what does it mean?
The rally began last year when two groups (with which I am professionally associated) — American Principles Project and American Principles in Action — began promoting the gold standard. When joined by the Lehrman Institute's web-based The Gold Standard Now (with which I am also professionally associated), the momentum grew notably stronger.
APP chairman Sean Fieler and APP policy director Jeffrey Bell appeared on The Wall Street Journal's opinion page and elsewhere (as did APP advisor Charles Kadlec) making the case for gold. Conservative icon Lewis E. Lehrman, one of the two pro-gold members of the Reagan Gold Commission, also appeared, for the first time in decades, in The Wall Street Journal to argue the case for gold. That article was picked up by 4,000 other sites, and The Weekly Standard's William Kristol responded by praising the gold standard on his blog.
The immensely respected Dr. Judy Shelton took leadership of the Atlas Economic Research Foundation's Sound Money Project. And the Manhattan Institute held a major event articulating the developing conservative consensus for the gold standard. The Tea Party Patriots conducted a full breakout session on the gold standard at their first American Summit. The Iowa Tea Party, in concert with APIA, is launching a statewide bus tour with the gold standard prominent on the agenda. Reagan official David Stockman and journalist James Grant recently drew almost 1,000 listeners to hear them advocate the gold standard in New York City. Stockman's remarks proved riveting.
Many people hadn't heard much about the return, in force and fury, of the gold standard proponents until Drudge nailed it. What the heck is it? Why does it matter?
The gold standard is the unfinished part of Reagan's (and Kemp's) economic growth agenda. Abundant empirical data demonstrates that the gold standard holds the key to recharging economic growth. America's economic growth has been punk for over a decade, barely more than 2% annually.
That's dead stagnant! With a strong dollar "” the gold standard "” economic growth would resume at a more normal 3% pace. It could even give us 4%. Compounded over a decade, the economy would be on a fast-growth path. This would go a long way towards solving the deficit crisis and even the entitlements crisis. And it would create 20 million jobs.
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There are so many angles to this, I just don’t know if I can mention them all. I believe in a strong dollar and while a gold standard is the best of all worlds, it does not compensate the need for money in times of war or other emergency needs (this has always been the issue). Now, I would take issue with the 2004-2007 tax revenue growth or any economic growth. Bush had his tax cuts, but he also ran up deficits and debt. All those years of tax cuts and it did not trickle down to create jobs nor did it create prosperity. Oh, you could say that unemployment was down to 4.5%, but that was under a false economy. Like I say, those tax cuts was for the here and now and did nothing for our future. The tax cuts was just a vehicle to make the economy “look good” and did not make our country any better. On top of that, at the time for some two years, the cost of the war was hidden in an emergency fund. And one step further on Bush, what he had was a “guns and butter” economics, not much different than what LBJ did. The difference is that LBJ had money printed and Bush went with deficits and debt. So I would consider the Bush era a real downfall for our country.
For some reason, I just don’t know who or what is running our country. Like I say, I think a strong dollar and something close to a gold standard would be very good economics. But here is another problem and that is globalization. You have talked about creating jobs. Well, you cannot create jobs if you are sending jobs overseas. You cannot create jobs if the world has added 2 billion cheap laborers into the free market system. And what is happening today is the trashing of unions and the middle class. Our middle class is losing jobs, and if they are lucky to have a job, then it is less pay and benefits. Again, no one, not democrat or republican, has a policy to deal with globalization. They all think that jobs will be created by our exports.
And that gets us to various economists and globalists who are advising Obama and the other side of the aisle. Yesterday, on CNBC, there were two guests. One was C. Fred Bergman and he was saying how our manufacturing was coming back and that we need a lower dollar to trade and export. And that we can sell to the rest of the world. And he added that we can’t do anything with housing, but we need manufacturing. And there was Jay Tiimmons,NAM pres. and CEO, says corporate taxes are too high and there is too much regulation. And other costs have to come down. So, I take it, that other costs means wages and benefits. After all, if you add 2 billion cheap laborers, then middle class wages have to come down. (this is something no one talks about)
So, I am listening to all this, and frankly, it is watching the three stooges on our economy. For the past decade, we were told that we were going to be a service economy and that we don’t need manufacturing and Bush came to my state and said “free trade is good” and we watched our factories close. To be more precise, some 57,000 factories have closed, which is 6 million jobs over the past decade. Now, yesterday C. Fred Bergman says we need manufacturing. So which is it? (A service economy or a manufacturing economy) And isn’t it a little late to tell us that we need manufacturing and jobs, when we spent the past decade shipping jobs overseas?
So the economists, globalists, and the fed wants a low dollar to create jobs by exporting goods. Well, I have a problem with trashing the dollar, and of over a decade of trashing the middle class, and now they want to export when we have factories closed. I mean, this is all hilarious. Frankly, I don’t see anyone in Washington that knows what the heck they are doing. You have the liberals doing their spending and the republicans are so caught up with their failed ideologies and all the wing nuts, that it is all destroying our country.
But the bottom line in creating jobs is that there is 2 billion cheap laborers who want jobs. So basically, there is not enough jobs to go around. And without jobs, you cannot solve one problem. So that is where we stand. I have not heard one credible policy to date, without attacking the middle class. While a gold standard would be a goal to achieve, you have to solve many problems to get there. You know, a needle in a haystack syndrome.
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