Friday, October 14, 2011

Yale Professor Disses Gold, Ron Paul

William Nordhaus, the Sterling Professor of Economics at Yale University, on Thursday night attacked gold and Ron Paul in one of the meanest comments I have seen in some time. WSJ reports:

...at a panel Thursday night in New Haven... Nordhaus dismissed notions of scrapping the central bank, as well as criticism of its chairman, Ben Bernanke, as “partisan” and “ignorant.”

“Return to the gold standard? Give me a break. We’re not in Kansas. This is an integrated world economy,” he said. And forget doing away with the Fed: “Every country has a central bank. Money cannot manage itself.”
The critic that Nordhaus doesn't name is, of course, Ron Paul. But calling Dr. Paul ignorant and partisan is absurd. Dr. Paul is the most principled man in Congress and is not attacking Bernanke on any type of partisan basis. He was just as critical of Bernanke and Alan Greenspan during Republican Administrations.

As far as ignorance, I'd like to see Nordhaus try and go up against Dr. Paul on the intricacies of the regression theorem and the proper methodology which should be applied to the science of economics.

And what's this about an integrated world? What is more integrated than gold as a hedge against the money printing of central bankers? Further what's this "Money can't manage itself" comment? Managed currency is at the core of central planning. Karl Marx called for it in the Communist Manifesto. If you want to talk about ignorance it is Nordhaus' view that money can't manage itself. It means Nordhaus fails to understand Hayek's deep and sophisticated meaning of "unintended consequences", which means for example the development of money as an "unintended consequence", not planned by anyone. It means Nordhaus has no idea of Ludwig von Mises' detailed explanation in his book, The Theory of Money and Credit, of how money developed.

Further, I'll match the record of gold against centrally planned money any day. In fact, I am willing to exchange all day with Nordhaus the central bank printed million dollar notes of the Weimar republic, Zimbabwe and Yugoslavia, each for an "unmanaged" ounce of gold. When do we start Nordy?

Nordhaus, btw, updates the college text Economics, which was originally written by that other gold hater, Paul Samuelson. What's not very well known is that while Samuelson spewed hate on gold as a money, he made a bundle by being long gold in the late 1970's, through a commodities trading firm, Commodity Corp., that he was affiliated with.

The words of one gold hater are now updated by another gold hater. That text Economics must be one helluva a book. These characters are simply apologists for the state. They downplay the inflation that is created by central banks, an inflation which benefits the state. Murray Rothbard nailed it when he reviewed a Samuelson edition of the text:

Before turning to the specifics of the ninth edition, let it be said that, as in the case of the preceding eight, the text suffers from the standard major ills of contemporary American economics: notably the sterile emphasis on the conditions of a static equilibrium which never can (and never should) exist, and the repeated sonorities of the Keynesian model presented without so much as indicating its major flaws and fallacies. Finally, like its predecessors, Samuelson's ninth scarcely equips the reader for facing the real world of ever-accelerating inflation or of the recurring reality of inflationary recession. No cogent explanation of these burgeoning and unwelcome phenomena is offered.

13 comments:

  1. IMO, this guy gave away his partisanship and ignorance when he stated "Money cannot manage itself."

    No, but people can.....

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  2. " Money cannot manage itself"

    Self-evident really. I mean, look how well the Fed is doing.

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  3. Robert, thanks for mentioning the regression theorem. That is the first thing that I thought of when I read, "money cannot manage itself". Boy, I wonder, can the markets of tennis shoes, beer, computers, guitars, etc manage themselves? If you take Nordhaus' statement that money cannot manage itself to its logical conclusion, he must mean that no other good can manage itself. After all, money is merely a good.

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  4. I am unable to distinguish these comments by a professor of economics from comments I read on youtube or yahoo by people completely ignorant of economics. Proof that higher education is useless, save for the purpose of keeping people in ignorance and sanctifying it with a diploma.

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  5. Look at it from the point of self interest. How many of these hacks would be put out of work if the government didn't manage its money? Then think about how many of these hacks are employed becuase government's mismanagement of its money and finances. Its a vicious circle. The more a government mismanages things following the advice of these hacks, the more economic hacks the government needs to try to fix the messes they've created.

    I'm not big on the value of regulation, but here's one for you anyhow:

    Any economist providing advice to government must have at least 10years of work experience in the private sector and at least 3 years as a top economic advisor to a private sector business, other then a bank or investment house.

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  6. William Dawbney Nordhaus, the Sterling (as in sterling silver?) Professor of Economics at Yale University, disses gold and Ron Paul.

    Turns out Dawbney is a member of Skull and Bones, and is one of the main economists working on climate change models - i.e. the global warming tax scam. Want to guess who he represents? Anyone???

    Time to put old Dawb in the unemployment line where he belongs...

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  7. Also, David Graeber, the Marxist anthropologist who is one of the ideologues behind Occupy Wall Street, comes from Yale (until 2007).

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  8. Money does not manage itself but real money only appears in the private economy where it is managed by banks. The government manages monopoly money which sends false signals throughout the price system.

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  9. a note to Dr. N: william.nordhaus@yale.edu

    Dear Bill,

    You undoubtedly will and should Ignore all who with vociferous emotion attack you personally for your defense of the Fed. This behavior drags on the momentum of the ideas, standards and principles inherent in the coming change. You see Bill, the free market message resonates in most people who listen. In fact, it seems those who only hear it at first eventually get around to listening. Right now, there's real pain, real suffering among the people of our country. They don't have access to Bloomberg, WSJ, et al to express what they feel, and think. Most have no idea what an endowed chair is or the mind twisting effect academic life can have on a person. Ironically, in most cases the academic hasn't a clue either, he's not evil just ignorant. Know what I mean Bill?

    For decades now, the US government/Fed has stolen my wealth by systemically debasing the dollar. I consider any person who advances by any means, ideas or a system that in any way harms me or my family an explicit threat. Bottom line Bill, this is the essence of where people are right now - this is the substance which gives rise to the fundamental knowing, "something is very very wrong", and to the infinitely unique ways it manifests e.g. blowback on you as an agent of destruction and pain.

    If you are capable of understanding the unrevised history of money and markets yet support the model of fiat currency and a mixed economy, then put light to it man. Stand up and debate it for all to see - especially your young and impressionable students - say with ....Dr. Paul. His combined attributes of high intelligence AND gentlemanly manner should, I would think, make a debate nearly impossible to resist.

    Embrace change,

    George

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  10. Graeber is a left anarchist. He thinks the state is the ultimate detriment to humanity's prosperity.

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  11. Good one, George. I think you meant "systematically" instead of "systemically". Minor quibble that doesn't change the heavy substance of what you wrote, but gives "academics" like Billyboy a flimsy reason to write off everything you wrote.

    Thanks for the email addy- I might just have to send him a piece of my mind, too.

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  12. He is right if "money management" means inflation.

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  13. If anyone wants to read a detailed demolition of "economists" Samuelson and Nordhaus, I recommend George Reisman's "Capitalism".

    Open the pdf and CTRL-F "Samuelson" and "Nordhaus."

    He makes exposing their errors seem so easy that you'll be laughing at how ignorant they really are.

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