How to Unite the Party: Fight the Fed!

The following is adapted from APP Chairman Sean Fieler’s remarks at the American Principles Project’s Practical Federalism Forum in Hooksett, N.H., on Oct. 3.

Photo credit: Kurtis Garbutt via Flickr (CC BY 2.0)

We Americans are in an anti-establishment mood.  We’ve been lied to. We know it and we are determined to put an end to it.  We want elected officials who will tell us the truth.

Now, Democrats interested in the truth.  And there are some, God bless their souls, that have a solution to the lie.

That solution is Bernie Sanders and his message of hope. The socialist dream is just 18 trillion dollars of spending, and we can tax the rich to pay for it.  Well, you’ve got to give them credit for honesty, but that’s not the solution I’m looking for.

We Republicans also want someone who will tell us the truth, but not to tell us about the state of big government and their plan to pay for it.  We want a candidate that is going to be honest about their plan to shrink the size and scope of government and revive the American experiment in limited government and the America dream of prosperity and liberty.

Our Republican primary process, reflects exactly that: a search for a new kind leader that is going to actually change things.

This makes a world of sense.  Just think, for a minute, about the journey that we Republicans have been for over three decades.  We’ve won elections.  We had Reagan, we had Newt, we had the Presidency and the Congress under George W. Continue Reading

Dante’s Inferno Suggests Why Washington Lies in the Eighth Circle of Hell — And How It Can Escape

Illustration by Sandro Botticelli: Dante and Virgil visit the eighth circle of Hell

Revealed, in my Forbes.com column last weekend:

Washington appears stuck in the Eighth Circle to which Dante assigns Falsifiers. Dante consigned alchemists and counterfeiters to the bottom of this next-to-lowest circle of Hell. As one commentator on classical literature notes Dante there encounters:

… an alchemist who extracted large sums of money from Alberto da Siena. Griffolino extracted money by promising Alberto that he would teach him to fly like Daedalus. When Alberto discovered he had been tricked, he had his “uncle,” the Bishop of Siena, burn Griffolino as a sorcerer. Griffolino is not punished for sorcery, but for falsification of silver and gold through alchemy.

[…]

As for alchemists, a long time ago — on August 15, 1971, to be exact — President Nixon succumbed to the blandishments of his Treasury Secretary John Connally to “close the gold window.” The promise was to make the economy fly. The dollar was converted from currency to money.  The promise proved false.

[…]

August 15, 1971 was the day the American Dream — of equitable prosperity — began to die. The Federal Reserve Note Standard was, in fact, an attempt at a sort of modernist alchemy.  It set the stage for the subsequent flat-lining of median family income. Now to turn that around.

[…]

The Fed’s halo noticeably is dimming. Word’s getting around. Before recess House Majority Leader Kevin McCarthy was handed a gift by Reps. Hensarling, Huizenga, Garrett, and Brady with the full committee passage of the Centennial Monetary Commission, H.R.

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Forbes.com’s John Tamny: The 21st Century Case For Gold is “Excellent and Very Important”

Photo credit: Bullion Vault via Flickr (CC BY-ND 2.0)

John Tamny, Political Economy Editor at Forbes.com, calls George Gilder’s new monograph, The 21st Century Case For Gold, published by the American Principles Project, “an excellent and very important read.”  Tamny:

“Thank goodness for Steve Forbes” is a frequent refrain among the small number of economics writers who support the dollar’s revival as a stable measure of value. Respected by serious people on the left and right, and among the various “Schools” of economic thought, Forbes’s strong support for gold-defined money lends the movement an air of credibility that otherwise wouldn’t exist.

Add George Gilder to what is a short list of grand names lending support to good money.  Readers interested in what drives Gilder’s thinking on the matter can access his new book The 21st Century Case for Gold: A New Information Theory of Money here.  It’s an excellent and very important read.

To read the full review, here.

And you can download a free and complete electronic version of The 21st Century Case For Gold here.

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 in Action’s Senior Advisor, Economics. Continue Reading

Ending Government Abuse of Money

Photo credit: blogdnd via Flickr (CC BY 2.0)

Richard Rahn, a Cato Institute senior fellow, has just read George Gilder’s “The 21st Century Case for Gold,” and he’s fascinated:

What is money? The coin and currency that you have in your pocket? The balances you have in your checking, money market or savings account? How about the value of your stocks and bonds? The government (mainly the Federal Reserve) provides numbers about the money supply — M1, M2, M3 and M0, which only goes to show that there is no simple definition on which all agree.

The economist-technologist-philosopher George Gilder, who has written many bestselling and provocative books, including “Wealth and Poverty,” “Microcosm,” “Telecosm,” “Sexual Suicide” and “Knowledge and Power,” has now produced a remarkable essay titled, “The 21st Century Case for Gold: A New Information Theory of Money.” In sum, Mr. Gilder argues that money is information, and that at some point a bitcoin-like non-government money will emerge on the Internet whose price will merge with that of gold, becoming bitgold.

Mr. Gilder notes that there are seven international units and measures, all grounded in basic constants of physics. These metrics are the second of time, the meter of extent, the kilogram of weight, degrees Kelvin of absolute temperature, the ampere of electric current, the mole of molecular mass, the candela of luminosity. These units cannot float because the metrics provide the basis of all industry and construction. He argues “the second of time” is the most basic because it is immutable and irreversible.

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Gilder’s “New Information Theory of Money” Fixes the Meaning of Money

George Gilder’s new monograph, “The 21st Century Case for Gold: A New Information Theory of Money,” offers a revolutionary alternative to today’s “deeply flawed understanding of the nature of money.” Drawing attention to the relationship between money and information, Gilder redefines and contextualizes the role of money in the 21st century as an information carrier in an information economy. Money is a “measuring stick” of economic activity, and nothing does this job better than gold.

Information is key to enterprise and innovation. “Money,” Gilder says, “is the channel that carries the information to investors, workers, small businessmen, major corporations and entrepreneurs.” Tampering with money distorts the information conveyed to people and organizations. That carries unintended consequences.

One such outcome is the all-too-cozy relationship between government and banks. The Federal Reserve has lured banks away from innovation and into the world of “proprietary trading” — the get-rich-quick plans that define the “new Wall Street.” Constantly changing currency allows banks to “thrive by serving government rather than entrepreneurs.” This does wonders for the profits of large financial institutions but robs the productive sectors of the economy of financial capital. The “new Wall Street” does not produce learning and hurts the truly productive members of society.

Because floating money creates big problems for an information-based economy, Gilder proposes an old solution with a new twist: defining the value of the dollar as a fixed weight in gold. Gold has long been the ideal monetary element for a number of reasons like its low melting point, resistance to decay, and natural relative scarcity. Continue Reading

Forbes to India and Emerging Economies: Stabilize Currency to Reach Full Potential

India rupee notes (photo via Wikimedia Commons, CC BY-SA 3.0)

Earlier this week, Steve Forbes published an article calling for developing economic powers to fix their currencies to the dollar or euro as a means to overcome obstacles to growth.

…all of these nations have overlooked a crucial requirement of economic greatness: a stable currency. Investors and entrepreneurs yearn for sound money, just as marketplaces function best when weights and measures are reliable and fixed.

“Ambitious countries must grasp the fact that economies with sound monetary policies always outperform those with chronically unstable money, ” he says, citing Britain as a pinnacle example of a booming economy historically facilitated by stable, gold-fixed currency.

What can today’s aspiring countries do to strive toward the success enjoyed by Britain and other leading economic powers?

They should start by formally fixing their currencies to either the dollar or the euro.

Turkey, for example, could formally tie its ominously weakening lira to the euro and thereby avoid another debilitating slide into a big inflation.

Sound currency would also strengthen countries suffering from international pressure:

A currency board would work wonders for beleaguered Ukraine. It’s no surprise, given Vladimir Putin’s aggression, that Ukraine’s currency, the hryvnia, has slid sharply, hurting the economy.

India would also set itself on a path to rival existing superpowers, including Britain:

In a few years India would be in a position to take the next step and adopt a gold standard. Within a generation of doing that it would surpass the economy of its former colonial master, Britain, as well as that of China.

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Kudlow: Sound Money Key to Unleashing Economic Growth

Larry Kudlow reports on the dinner at which Giuliani made news by dissing President Obama’s love for America.  His new Committee to Unleash American Prosperity wants us to return to the first principles of economic growth:

It was the second event sponsored by the Committee to Unleash American Prosperity, a new group founded by Arthur Laffer, Steve Moore, Steve Forbes, and myself. Just as the Committee on the Present Danger — formed by Midge Decter, Norman Podhoretz, and Irving Kristol — worried about the decline in American foreign policy in the late 1970s, we are worried about the decline in American economic growth over the past 15 years.

Our view is simple: To maximize growth, jobs, opportunity, and upward mobility, the U.S. must recapture the first principles of economic growth that were so successful in the 1960s, ’80s, and ’90s. Namely, pro-growth policies should seek a low-rate, broad-based flat tax, limited government spending, the lightest possible economic regulations, sound money, and free trade.

Read the rest over at National Review.

Paul Dupont is a legislative assistant at American Principles in Action. Continue Reading