Monday, August 29, 2011

The Truth about Ron Paul as an Extremist

Led by Nouriel Roubini, MSM continues to attack Ron Paul's belief that the country would be much better off on a gold standard. It's radical, they say. Roubini calls it insane. And talking heads say it is taking the Republican Party in a extreme new direction. Ron Paul says he is just trying to bring the country back to its roots.  Indeed, a look back in history shows that at the start of the 20th Century, the Republican Party was all for a gold standard.

The 1900 Republican Platform reads in part:
We renew our allegiance to the principle of the gold standard and declare our confidence in the wisdom of the legislation of the Fifty-sixth Congress, by which the parity of all our money and the stability of our currency upon a gold basis has been secured.
Four years later, the Republican Platform said this about gold:
We believe it to be the duty of the Republican Party to uphold the gold standard and the integrity and value of our national currency.
It seems that those who fail to learn history also fail to realize that what they view as extreme may well have been at one time a cornerstone belief. As Ron Paul has stated many times, he is not an extremist. He simply wants to bring the country back to a period when respect for freedom, sound money and personal property rights were the norm. Returning to a gold standard (or perhaps competing currencies) is simply moving the country back toward a period when it was a  much freer country.

(Thanks 2 Andre Grillon)


  1. Moving off the gold standard added greatly to the government's POWER, by permitting them to manipulate the money supply. Increasing the money supply drives inflation, a politician's best friend. Inflation is a 'hidden' tax on all the productive members of society, allowing the govt to milk them for funds to distribute to their favored special interests.

    "Extremism in defense of liberty is no vice." - Barry Goldwater.


  2. I am a Ron Paul supporter but still undecided on the issue of the gold standard. While there may be more sophisticated points against it, the argument I find most compelling is quite simple. By virtue of its rarity, gold is rather easily controlled, or at least influenced/manipulated by anyone with adequate purchasing power.

    On the other hand, an idea proposed by the American Monetary Institute seems to have merit. They argue for government spending new money into the economy via infrastructure construction - thereby basing dollar value on the real assets of the country.

    I'm not pitching for the AMI, I don't understand the broader implications of their proposal well enough to do that. Just throwing an idea on the table. The gold standard is problematic and seems to be one of the taller hurdles in Dr. Paul's campaign race. On the other hand, with the (currently terrible, imo) idea of an Infrastructure Bank getting press and maybe some traction in DC, perhaps that scheme could be adapted to the AMI notion, and used to produce a sound money supply. For a change.

  3. Failure to learn history or intellectual dishonesty, prejudice and bias?

    The Republican party could go the way of the Whig's for all I care.

  4. @Dev

    The AMI approach would still drive inflation and be no better than any other government spending. Sure, there'd be more infrastructure, but would it be any different than having more: housing, solar panals, ethanol, corn, drones, tanks, and whatever else gov't decides we need more of.

    AMI would be another example of ignoring the unseen. Forget the fact that the new money will serve as inflation regardless of what the money is used for, all those resources used to build infrastructure will be resources NOT used to build things privately. Concrete for a home swiming pool will rise, perhaps construction equipment rental costs will rise, the price of skilled construction labor goes up, etc. All that land, labor, and capital will become a malinvestment and would be better used at the hands of private citizens deciding what to do with all those resources.

    Single sentence response to AMI proposal: Do we really need more examples of these:

  5. It is not possible to limit the size of government under a fiat money system. If you believe in limited government, you must also necessarily believe in removing the means by which big government is sustained.

  6. Tom Woods recently made important distinctions between types of gold standards and not all are desirable-- can't find the reference though.

  7. david nh,

    It is not possible to limit the size of government under a philosophical system which grants the government a monopoly on the use of violence. If you believe in freedom and understand economic incentives, you must also necessarily believe in removing the means by which government is sustained.

  8. Anything is better than the current standard of fiat money. As long as it is tied to something with value that is constant, I am all for it. Gold is my preferred asset.

  9. Didn't Roubini say there is no way Gold would ever get to $1500 an ounce?

  10. To all,

    Ron Paul is not calling for a return to the gold standard. This is clearly outlined under "issues" of his official campaign website at You can also garner this information by listening to him talk, yes he acknowledges the gold standard is better than what he have today, but when he speaks on what he would so as president his answers are always the same as the ones that appear on his campaign website, in his books, and elsewhere: "legalize competing currencies, allow people to choose what they wish to use as money, and repeal legal tender laws."

    Here is a good quote on the matter when discussing it in his most recent book: “I would like to see the banking system operating as it would under free enterprise, meaning no central bank. I would like to see competitive currencies emerge on the market and be permitted to thrive. I’ve been pushing for these solutions for decades.” Ron Paul, Liberty Defined (2011) p. 201

  11. Robert Fellner,

    If he succeeds in removing legal tender laws, has he suggested how the government would be able to assess whether or not what a person was attempting to pay in taxes (say, 30,000 Taylor Conant-notes) was sufficient to extinguish their individual tax liability?

  12. @Anonymous 10:10 AM
    I thought I remembered something from Tom Woods on the different types of gold standards as well, but cannot find it either. What I did find, however, was a recent piece by Bob Murphy on LRC (, and an even more recent one by Gary North:

    In the penultimate paragraph, North writes:

    "Here is the real thing: a free market standard without any government involvement – no mint, no central bank, no legal tender laws, no printing presses, no warehouse receipts, no "free" storage. Just this: laws against fraud and laws enforcing contracts. [...]"

  13. Taylor - the last time I checked it was possible to accurately establish exchange rates between various currencies by going to a currency exchange.

    The US govt can demand payment in a specific currency, leaving its serfs to do the exchange themselves. If anything, this is the only way to preserve value of something as inane as US$ (i.e. people will be forced to give real goods to US govt in exchange for the green papers they'd need to pay off the taxman).

  14. @Taylor... I can't speak for Paul (and I don't care enough to start googling) but I'd imagine that taxes would still have to be paid in FRN. Meaning that, even if you didn't hold FRN, when tax time came around, you'd have to buy some.

    I'm not sure what it is about your "Taylor Conant-notes" that would make people want to use them but, assuming they were used and taxes were due, you would need to find someone willing to sell you FRNs in exchange for your TCNs.

  15. So then there would still be legal tender laws (for public debts) and therefore FRNs would still have a public subsidy, so there would not be a "free market" in money.

    There would be a freer market, but not a free market.

    If you still have to pay your tax burden in FRNs, and the government can still print them up at will, I am not sure what has been gained other than nominal freedom of exchange.

  16. @Taylor... No shit. If you have a government (an institution with the authority to tax), you don't have a free market. Monopoly government and free markets are mutually exclusive. You either have one or the other.

    Still, there would be 2 major changes. (1) It would eliminate capital gains and sales taxes on gold and silver money (or whatever the market chose to use as a medium of exchange). (2) No one would be obligated to accept FRNs (take 10 minutes to think about what that would mean for both the government and the companies who do business with the government).

  17. Ron Paul "is not an extremist. He simply wants to bring the country back to a period when respect for freedom, sound money and personal property rights were the norm."

    Exactly. The extremists are everyone else today (sadly the majority) who want to continue this Unconstitutional madness. One of two things will happen:

    1. We will return to our smaller, limited, Constitutional Federal Government with sound money now, or
    2. We continue our madness and have a financial collapse that will force us into a smaller, limited, more Constitutional Government later with either a virtually worthless paper US Dollar or a return to sound money (gold/silver)

    I say, let's do the right thing now rather that wait for later when the pain will be worse & last longer.