Thursday, August 30, 2012

How They Stacked the Last Gold Commission Against Gold

It was packed with Milton Friedman monetarist gold-haters. WSJ's Seth Lipsky explains:
What has stayed with me from 1981—I covered the commission as a young editorial writer for this newspaper—is how momentum for a new gold standard faded amid the successes of the supply-side revolution. President Reagan pushed through his tax reductions and Federal Reserve Chairman Paul Volcker maintained tight money. Inflation was defeated.
It should be noted this was all smoke and mirrors from the Republicans. Reagan didn't cut taxes and Volcker, although slamming the brakes on money printing, when he first took over at the Fed,  started printing aggressively in the summer of 1982.

Lipsky goes on:
The 1981 commission was also stacked against a gold-backed dollar from the start. The ruling philosophy was monetarism—which, as propounded by Milton Friedman, seeks to keep prices steady by adjusting the money supply. The commission's executive director was Anna Schwartz, co-author of Friedman's "Monetary History of the United States," and the Democratic-controlled House held firm to monetarist orthodoxy.
If there is a new gold commission it will be stacked again, perhaps with Harvard's Greg Mankiw as lead obstructionist.

1 comment:

  1. Summer of 2008?

    I know it's a typo but which year did you mean?