George Gilder: All Forms of Money Must Be Based on Time (VIDEO)

George Gilder is most recently the author the ground breaking The Scandal of Money: Why Wall Street Recovers but the Economy Never DoesHe is a founding fellow of the Discovery Institute and a senior fellow at the American Principles Project, which sponsored this book.

Gilder is also the author eighteen other well-regarded books including Knowledge and Powerand Microcosm. After the publication of Wealth and Poverty, he became Ronald Reagan’s most frequently quoted living author.

In the following clip — from a speech Gilder gave at FreedomFest 2016 — he explains how money, just like all forms of measurement, must be ultimately based on time:

But this is the great moment of opportunity as well as being a scandal. The opportunity has created again the efflorescence of the theory that began with Kurt Godel in 1931 when he showed that any logical system is necessarily dependent on propositions which can’t be proved within the system itself.

I think money is a logical system like that; it has to have roots and value outside of the system itself. Money cannot be part of what it measures. Money is not a commodity. This is the only relevant error I see in Austrian economics — that money is somehow a commodity.

…Money is [not a commodity], it is a measuring stick and it is necessary for a flourishing economy. It too has to be finally based on time. You can’t escape time; you can’t get away from time. When you try to do it, you just confuse everything.

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What ‘JFK and the Reagan Revolution’ Reveals About Trump

Donald Trump (photo credit: Darron Birgenheier via Flickr, CC BY-SA 2.0)

Remember prosperity? Want it back? Here’s the secret formula, which has always worked and would work again: Cut marginal tax rates and restore integrity to the dollar.

Donald Trump is campaigning on meaningful marginal tax rate cuts and implying, with his offstage praise of the gold standard, a solid instinct for monetary integrity and how to produce it. One hopes so as it requires both together.

Here’s the brief. Lawrence Kudlow and Brian Domitrovic have just published what deserves to be the most important book of the 2016 presidential election cycle: JFK and the Reagan Revolution: A Secret History of American Prosperity. It provides a solid understanding of the key issue of the 2016 race — the economy.

Reagan made “Supply-Side” famous by campaigning on and then enacting most of the Kemp-Roth 30% across-the-board tax rate cut. But John F. Kennedy was the original Supply-Sider. The book’s Big Reveal: Jack Kemp designed this tax cut as a direct copy of Kennedy’s own.

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Read the full article at Forbes.com.

Ralph Benko, internationally published weekly columnist, co-author of The 21st Century Gold Standard, lead co-editor of the Gerald Malsbary translation from Latin to English of Copernicus’s Essay on Money, is American Principles Project’s Senior Advisor, Economics. Continue Reading

George Gilder: Angry About Inequality? Here’s the Real Culprit… (VIDEO)

George Gilder is most recently the author the ground breaking The Scandal of Money: Why Wall Street Recovers but the Economy Never DoesHe is a founding fellow of the Discovery Institute and a senior fellow at the American Principles Project, which sponsored this book.

Gilder is also the author eighteen other well-regarded books including Knowledge and Powerand Microcosm. After the publication of Wealth and Poverty, he became Ronald Reagan’s most frequently quoted living author.

In the following clip — from a speech Gilder gave at FreedomFest 2016 — he discusses how near-zero interest rates, far from stimulating economic growth, actually create an environment which fosters inequality.

Zero interest rates essentially zero out time.

As Hayek put it, the root and source of all monetary evil is the government monopoly of money. Matt Ridley said the government monopoly of money not only suppresses innovation and creativity, not only retards growth, it also fosters inequality. Because what we have today is a bifurcated economy produced by the government monopoly of money that fosters inequality.

Think of most of us. Most of us get paid by the hour, paid by the day. We are inexorably caught in the economy of time; that’s how we get compensated. But what’s happened in the world economy in recent decades as a result of the government monopoly of money and that exploitation of that government monopoly to allow the unlimited expansion of government power through the creation of money.

What’s happened is a financialization, a hypertrophy, of finance in the world economy.

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What’s Left? Trump Against Clinton Echoes Capitalism Against Communism

From left: former Secretary of State Hillary Clinton and Donald Trump

Hillary Clinton is not a communist.

That said, she is certainly running to the left.

What’s left?

That’s actually an interesting question. People throw around the terms “left” and “right” with an instinctive, imprecise, sense of their meanings. It’s good to get back to first principles.

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There are many gradations of leftist sentiment, from outright communism to socialism to social democracy to progressivism. That said, they know their own. The Communist Party USA recently, to little notice by the mainstream media, expressed its enthusiasm for Democratic Party nominee Hillary Clinton (h/t to WorldNetDaily) in the CPUSA’s official propaganda organ, People’s World:

Clinton has to provide a vision for a new America, tying together the Democratic platform planks — called the most progressive ever — among them, $15 an hour minimum wage, debt-free and tuition-free college and universal health care, with a compelling narrative that inspires people to think big and do big-hearted things.

People need to vote FOR a candidate, otherwise voters are more likely to stay at home. Voting for the first woman president can also be a strong motivator.

The union movement, communities of color, students, women, progressives and the newborn “political revolution” can help generate voter enthusiasm by talking and tweeting about Clinton and the issues. Challenging sexism is a must as well as racism, which has been a coded (and overt) staple of presidential elections for decades.

However, there are many weeks until Election Day.

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Trump’s Knockout Punch Opportunity

Donald Trump (photo credit: Gage Skidmore)

In the first of the three presidential debates, only Trump’s handlers scored his performance as better than a draw. Both candidates jabbed and scored some points against the other. Pity that Trump did not launch a haymaker against Hillary’s big glass jaw on the economy.

Last May, The New York Times reported:

Hillary Clinton already has an assignment for her husband, Bill Clinton, if they return to the White House next year. The former president, Mrs. Clinton told voters on Sunday, will be “in charge of revitalizing the economy.” “Because, you know, he knows how to do it,” she said.

Less well reported was the progressives’ fury kindled by this. The neoliberal Bill Clinton, who, mostly embellishing on the Reagan/Kemp Supply-Side legacy under pressure from a newly Republican Congress, cut the capital gains tax; mended, rather than ended, a disgraceful welfare regime; and materially advanced free trade.

Massive job growth ensued. After an initial two years of soggy economic growth, America generated over 20 million new jobs under Clinton, putting, among other things, the federal budget into surplus. This, however, did not endear Clinton to the dogmatic progressive left.

The followers of Bernie Sanders, with whom Hillary Clinton then was locked in mortal primary combat (and whose election day turnout she now needs), were outraged. Clinton immediately backpedaled and adopted huge swaths of the Sanders economic platform.

This made her vulnerable in the general election. Candidate Clinton’s initially embracing and then distancing herself from President Clinton’s economic policy success represents a dangerous flip flop. Continue Reading

The Gold Standard: Copernicus, Newton, Priestley… and Trump?

From left: Sir Isaac Newton and Donald Trump

Sam Kriss, in The Atlantic, has a wonderful new story, “Flat-Earthers Have A Wild New Theory About Forests,” in which I find an oblique allusion to… myself.

Still, among all the bizarre, self-enclosed universes the internet has to offer — gold-standard bores, UFO chasers, people who believe that cartoons are real in a nearby dimension or that the secret rulers of the world are betraying their existence by leaving little clues on the currency — the flat-earthers are special.

No, I’m not a UFO chaser, nor a believer in cartoon dimensions, or a proponent of the theory of secret rulers of the world. As to the latter, I once published a blog debunking, rather re-debunking, the alt-right canard that a Rothschild said something like “Give me control of a Nation’s money supply, and I care not who makes its laws.” (It’s a totally fabricated quote.)

I’m a gold standard bore. And I’ve been called, by a Washington Post Magazine (humor) columnist, “the second most conservative man in the world” for my gold standard advocacy.

There is a delicious irony in lumping a gold standard geek in with premoderns like Flat Earthers.

The gold standard’s pedigree runs from Copernicus (who dispelled the allied theory that the Sun goes around the Earth and also wrote brilliantly in favor of the gold standard), Sir Isaac Newton (founder of modern classical physics who, as Master of the Royal Mint, accidentally invented the modern classical gold standard), and Joseph Priestley (the discoverer of oxygen, who wrote at length about the gold standard). Continue Reading

George Gilder: Money Is a Measuring Stick, Not a Magic Wand (VIDEO)

George Gilder is most recently the author the ground breaking The Scandal of Money: Why Wall Street Recovers but the Economy Never DoesHe is a founding fellow of the Discovery Institute and a senior fellow at the American Principles Project, which sponsored this book.

Gilder is also the author eighteen other well-regarded books including Knowledge and Power and Microcosm. After the publication of Wealth and Poverty, he became Ronald Reagan’s most frequently quoted living author.

In the following clip — from a speech Gilder gave at FreedomFest 2016 — he discusses why government ought to consider money as a measurement of value rather than as a magic wand to create growth:

If money is not an instrument of power, not a magic wand that governments can wave to summon economic growth, what is it?

I’ve been pondering this issue for many years and I didn’t get it right in Wealth and Poverty. Steve Forbes gave me the key insight when he began focusing on money as a clock or as measuring stick. He used the analogy of a clock. If a measuring stick is changing constantly, how can enterprises use money as a guide to their learning processes. If the clock was changing day by day; the hours change, the minutes change, as Steve pointed out, we would soon have times of false obligations — you would have to be constantly hedging the clock.

And that’s really what’s happening, because I believe that most fundamentally, money is time.

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George Gilder: This Simple Theory Explains the Success of Capitalism (VIDEO)

George Gilder is most recently the author the ground breaking The Scandal of Money: Why Wall Street Recovers but the Economy Never DoesHe is a founding fellow of the Discovery Institute and a senior fellow at the American Principles Project, which sponsored this book.

Gilder is also the author eighteen other well-regarded books including Knowledge and Power and Microcosm. After the publication of Wealth and Poverty, he became Ronald Reagan’s most frequently quoted living author.

In the following clip — from a speech Gilder gave at FreedomFest 2016 — he discusses how information theory relates to money and why all wealth is fundamentally knowledge:

…A professor at MIT named Cesar Hidalgo recently gave a good example to help you understand this concept. When an expensive car crashes into a wall, all its value disappears, although every molecule and atom remain. Value is information, the car is knowledge. And I can prove that all wealth is essentially knowledge.

…I believe that if wealth is knowledge, then growth is learning. Now to have learning, certain rules apply. Learning is most essentially experimental. If outcomes are guaranteed, learning is essentially prohibited.

…The reason capitalism is such an engine of learning and thus an engine of economic growth is because every business plan can fail; bankruptcy is possible. But if you have government guaranteeing everything by printing money whenever any enterprise is in jeopardy of falsification or bankruptcy then learning is prohibited. So the very policy that government follows to guarantee growth, intrinsically thwarts growth by arresting the learning process — by falsifying the learning process.

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Donald Trump, the Politicized Fed, and the Golden Rule

Donald Trump (photo credit: Gage Skidmore)

Left-leaning thought leaders have been unfairly scalding Donald Trump for his recent observations that the Federal Reserve is politicized. Therein an inconsistency, verging over into naked hypocrisy, by the left is revealed.

The LA Times summed up the story in an article headlined “Is the Fed Politically Biased“:

Every four years, the independent Fed faces the same predicament: how to try to manage the economy without appearing to favor either party’s presidential candidate.

The sly phrase is “without appearing to.”

Which, of course, is a very different thing than “without.”

The politicization of the Fed is one of Washington’s biggest Open Secrets.  As I wrote in Forbes.com, “Dear Chair Yellen: Mend The Fed“:

As journalist Steven Solomon wrote in his indispensable exploration of the Fed, The Confidence Game: How Unelected Central Bankers Are Governing the Changed World Economy (Simon & Schuster, 1995):

Although they strained to portray themselves as nonthreatening, nonpartisan technician-managers of the status quo, central bankers, like proverbial Supreme Court justices reading election returns, used their acute political antennae to intuit how far they could lean against the popular democratic winds.  “Chairmen of the Federal Reserve,” observes ex-Citibank Chairman Walter Wriston, “have traditionally been the best politicians in Washington.  The Fed serves a wonderful function.  They get beat up on by the Congress and the administration.  Everyone knows the game and everyone plays it.  But no one wants their responsibility.”

Why, then, gold?  As Virgil wrote in the Aeniad: Facilis descensus Averni. 

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Clinton’s Campaign of Firepower Is Losing the 2016 Election Against Trump’s Guerrilla Tactics

From left: Donald Trump and former Secretary of State Hillary Clinton (credit: Gage Skidmore/Marc Nozell)

Much to the incredulity of the elite political class, Donald Trump is rapidly closing the gap and even surpassing Hillary Clinton. This extends to the critical electoral college swing states. Trump can stumble. Hillary could reboot and change the calculus.  That said, right now: advantage Trump.

It gets harder with each passing day to change the fundamental dynamics of the race. The core dynamics of this are masked by a mainstream media preoccupation with non-issues such as Clinton’s walking pneumonia, Trump’s acknowledgement that Obama was born in Hawaii, and so forth.

All that is noise. Few voters care about such trivia. Rather, voters care about prosperity, peace, and who seems better able to protect their interests and their values.

Above all, now, the voters care about the American Dream, composed of two elements: Prosperity and Economic Justice.

Both are legitimate and essential.

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Trump was the one Republican candidate during the primaries who drew a line in the sand against cutting Social Security benefits. He threatens punitive action against Big Business for shipping jobs to cheap labor places like Mexico. Believe it or not … like it or not … the message “I’m with you” resonates with workers. (Full disclosure, I’m proudly a dues paying member of the AFL-CIO.)

I’ll take a boss who breaches etiquette but offers raises, bonuses, and opportunity for promotions. That’s preferable to one who has excellent manners but would manage the company – America — so there was no way up for me.

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