A Letter to the Left: The Gold Standard Will Restore Upward Mobility

About a year ago, Stan Sorscher, Labor Representative, Society for Professional Engineering Employees in Aerospace, published a frighteningly important blog at The Huffington Post (where I also blog on a regular basis) headlined “Inequality — “X” Marks the Spot — Dig Here.”

It was as important for what it gets right as for what it misses.

Sorscher writes:

In 2002, I heard an economist characterizing this figure as containing a valuable economic insight. He wasn’t sure what the insight was. I have my own answer.

Figure 1. Something happened in the mid-70’s

The economist talked of the figure as a sort of treasure map, which would lead us to the insight. “X” marks the spot. Dig here.

This figure tells three stories. First, we see two distinct historic periods since World War II. In the first period, workers shared the gains from productivity. In the later period, a generation of workers gained little, even as productivity continued to rise.

The second message is the very abrupt transition from the post-war historic period to the current one. Something happened in the mid-70’s to de-couple wages from productivity gains.

The third message is that workers’ wages – accounting for inflation and all the lower prices from cheap imported goods – would be double what they are now, if workers still took their share of gains in productivity.

[…]

This de-coupling of wages from productivity has drawn a trillion dollars out of the labor share of GDP.

Economics does not explain what happened in the mid-70s.

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To Trump and Clinton: Heed the Lesson Jimmy Carter Never Learned

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

Yesterday I observed here how the 2016 race reflects American conditions in the late 1970s — also stagnant — and how the political elites are echoing President Jimmy Carter’s feckless reaction in his notorious July 15, 1979 address to the nation in which he said, in part:

The threat is nearly invisible in ordinary ways. It is a crisis of confidence. It is a crisis that strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation.

The erosion of our confidence in the future is threatening to destroy the social and the political fabric of America.

What’s really going on? The destruction of our social and political fabric derives from stagnation, not vice versa.

My Letter to the Left: the Gold Standard Will Restore Upward Mobility was an analysis of an important piece by Stan Sorscher in The Huffington Post, itself headlined “Inequality — “X” Marks the Spot — Dig Here.” Sorscher perceptively wrote:

The second message is the very abrupt transition from the post-war historic period to the current one. Something happened in the mid-70’s to de-couple wages from productivity gains.

The third message is that workers’ wages – accounting for inflation and all the lower prices from cheap imported goods – would be double what they are now, if workers still took their share of gains in productivity.

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The Wall Street Journal Takes Notice of the 2016 GOP Platform and the Gold Standard

Kate Davidson in The Wall Street Journal recently took note of a GOP 2016 plank that had been largely overlooked in all the focus on the social issues in the Platform Committee: “GOP Platform Includes Proposal to Study Return to Gold Standard.”

The Republican Party’s 2016 platform calls for a commission to explore the feasibility of effectively returning the U.S. to a gold standard.

The idea has been popular with parts of the GOP for years, but hasn’t gone very far.

The new platform, approved at the party’s convention Monday, echoes similar language in the 2012 GOP platform by calling for a commission to “investigate possible ways to set a fixed value for the dollar.”

[…]

The party platform isn’t binding on the president or other elected GOP officials, but reflects the thinking of many party activists.

Several Republican presidential primary candidates expressed support or interest in the idea during the campaign. Sen. Ted Cruz of Texas reiterated his support for returning to the gold standard in a debate last November. Sen. Rand Paul of Kentucky said the idea should be studied. Neurosurgeon Ben Carson alluded to the idea, saying, “We’ll have to tie our currency to something,” while former Arkansas Gov.  Mike Huckabee advised, “Tie the dollar to something fixed and if it’s not going to be gold, make it the commodity basket.”

To which could, and surely should, be added nominee Donald Trump’s two glowing public statements on the gold standard and the vice presidential nominee Mike Pence forward-leaning statements, when a prominent member of Congress, about the gold standard. Continue Reading

Picking Mike Pence Really Was a Grand Slam for Donald Trump

Indiana Gov. Mike Pence with his wife Karen Pence (photo credit: Gage Skidmore)

Mike Pence? Full disclosure: I served as head of the Super PAC seeking to draft Pence into the 2012 presidential race. Having long been persuaded of Pence’s superior leadership qualities, I’m even less objective than usual.

We called Pence “The Conservative Champion” and for good reason. Then, in 2012, Pence made the right decision: to run for governor of Indiana. That was an opportunity for distinguished public service. As it happened, it was also a perfect boot camp for the vice presidency.

[…]

One of the reasons that Pence showed himself extraordinary may have faded from general memory. It has not faded from mine. Nor has it been forgotten, or forgiven, by the left, who are now highlighting this, much to my delight. In 2010 Pence gave a major speech at the Detroit Economic Club. As the center-left ThinkProgress.org then reported:

The first item of Pence’s five-point for the economy is a “sound monetary policy.” Pence elaborated that he believes a return to the gold standard could create such a policy:

PENCE: Before I move on, I’d like to note, in the midst of all that’s happened recently — massive borrowing and spending, QE2 — a debate has started anew over an anchor to our global monetary system. My dear friend, the late Jack Kemp, probably would have urged me to adopt the gold standard, right here and now in Detroit. Robert Zoellick, the president of the World Bank, encouraged that we rethink the international currency system including the role of gold, and I agree.

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Ben Carson, Hillary Clinton, Saul Alinsky, And Donald Trump

Former Secretary of State Hillary Clinton (photo credit: Marc Nozell via Flickr, CC BY 2.0)

Townhall‘s Cortney O’Brien provides an interesting report on Dr. Ben Carson’s keynote address to the recent Faith and Freedom Coalition gala. It is headlined “Carson: We Need To Inform People About Hillary Clinton’s Radical Hero.” Therein she reports:

A good introductory lesson, he noted, would be by magnifying presumptive Democratic nominee Hillary Clinton’s radical history.

“We need to inform people about Hillary Clinton’s hero – Saul Alinsky.”

Alinsky, a 1970s community organizer, wrote the book Rules for Radicals. It became a field guide for progressives regarding how to organize people to pursue liberal causes. As you open the book, Carson noted, you read that Alinsky “dedicated” it to Lucifer.

Clinton was on a “first name basis” with the author in college, Carson explained. What’s more, the Washington Free Beacon discovered previously unpublished correspondence between the two, revealing just how smitten Clinton was with his radical social agenda.

Clinton’s progressive hero can help explain her dangerously far left plans for the country.

Saul Alinsky, of whom I have written many times, including here, is a much misunderstood figure. We agree with Dr. Carson.

We need to inform people about Saul Alinsky. Just … not for the reasons he suggests.

First, note the quotation marks that Ms. O’Brien very appropriately put around the word “dedicated” as to Lucifer.  Rules for Radicals in fact (you could look it up) was dedicated To Irene, his wife. Continue Reading

Conservatives Talk Monetary Policy with Janet Yellen

Federal Reserve Chairwoman Janet Yellen (public domain via Board of Governors of the Federal Reserve)

Last Friday, a coalition of more than 20 conservatives and libertarians met with Federal Reserve Chair Janet Yellen to discuss the impact of Fed monetary policy on middle income and working families. The group, led by American Principles in Action Director of Monetary Policy Steve Lonegan, received a lot of great press coverage.

Lonegan worked diligently to make this meeting happen. Back in December, after news broke that Yellen had met with a group of left-leaning community activists, Lonegan sent a letter to Yellen requesting a meeting with a group of center-right thought leaders and economists. Initially, the Federal Reserve did not respond.

Lonegan didn’t give up. He then hand-delivered another letter requesting a meeting and followed that up with a press conference outside the Federal Reserve building in Washington, D.C.

Chair Yellen listened, and on February 27 the meeting took place.  It was very well covered by the national media.

Latest Twist in Audit the Fed Debate

The Marriner S. Eccles Federal Reserve Board Building – Washington, DC

The political firepower generated by Sen. Rand Paul’s Audit the Fed bill is now giving new attention to an alternative or potentially complimentary political response: to shift power from the New York Federal Reserve Bank to other regional Federal Reserve Banks.

The Federal Reserve System’s most crucial policy body is the Federal Open Market Committee, made up of members of the Board of Governors and of district Federal Reserve Bank presidents.  The FOMC is the body that decides whether to raise, lower, or hold steady the discount rate, widely considered the bellwether for establishing the other interest rates.

Does the current composition of the FOMC give too much power to Washington and Wall Street?

The Wall Street Journal’s Real Time Economics blog notes that a powerful political force—community banks—appears to be getting behind the proposal first championed by Dallas Federal Reserve Banks President Richard Fisher:

The Independent Community Bankers of America is calling on Congress to pass legislation that would implement several changes Mr. Fisher proposed earlier this month. The letter was first reported by Bloomberg News.

No lawmaker has introduced legislation to implement Mr. Fisher’s proposal, but a spokesman for Rep. Mac Thornberry (R., Texas) said the congressman is considering offering such a bill.

Mr. Fisher favors, among other things, ending the New York Fed president’s permanent role as vice chairman of the central bank’s policy-setting Federal Open Market Committee, and instead rotating the position among the 12 regional bank heads.

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