December 10, 2008

The Gold Standard?

The National Review has an interesting article pending extolling the merits of a return to the gold standard. It's a fairly technical article, but if you enjoy reading economic treatises then it's worth a read because he makes a compelling, albeit insufficiently robust argument. He expounds the benefits quite well, but does not address the potential negatives. He does touch on the difficulties of getting international agreement, the difficulties of making the switch and the lack of political will/desire to do so. But not the real potential negatives, at least robustly enough.

But he does address many positive aspects that could/would result from a change, such as forcing governments to not run deficits, helping trade imbalances and helping to restore the manufacturing sector in America. These are important and deserving outcomes, and ones worth consideration. But is the correlation between the gold reserve idea and these outcomes guaranteed? That requires a more esoteric economic discussion, but it is one I would love to hear and one that deserves to be sat through, even if you are someone who doesn't like / doesn't get / doesn't care about economic theory. The outcome matters.

Nevertheless, his points are quite worthy of consideration and further discussion. There are detractors of course, likely on both sides of the political spectrum.

As an aside, a friendly Buckley-versus-Reagan-Panama-Canal-style televised debate amongst conservatives is something we need to see more often. It's a great way to look at issues from various conservative viewpoints. Even if the principles do not coalesce around a single viewpoint, it gets our viewpoints out there and also shows that the Republican/conservative world views do not conform around a single set of ideas. It shows that we are a considered and reasoned group and our ideas are based on both principled values and thought-out positions.

Unfortunately I couldn't find a Reagan clip to embed here but wouldn't you rather see those two gentlemen debate than Olbermann versus O'Reilly? No offense intended to Bill O'Reilly, I'd enjoy seeing him debate someone like Sean Hannity on an issue of substance where substantive ideas could be exchanged rather than any rabid liberal where it is likely to descend into something little better than repeated talking points. You might as well try to reason with a paint chip.

Getting back to my main point about the gold reserve / gold standard, there are many articles
that are pro and con on the idea. Some examples of each below;


Ron Paul (note I am not a Ron Paul supporter, but he does make some interesting points at times. He might be kooky, but I don't think he's a total kook).
Kitco (biased, I'm sure).
Lawrence White @ the Cato Institute


Credit Suisse
Associate Professor of Economics Brad De Long (he sources Krugman a couple of times, so it's not my favorite opinion).
Steve Saville

So what's the right thing to do, practicality aside since the time for timid solutions has passed? I'm not convinced either way at this point but it would seem that the benefits warrant looking for a way to overcome the objectionable points.

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