Tuesday, April 30, 2019

Trump's Potential Fed Nominee Throws Gold Standard Under the Bus

Stephen Moore
Fake free market Stephen Moore sat down with The Wall Street Journal’s Paul Kiernan for an interview.

Once, when he wasn't seeking to get nominated as a governor of the Federal Reserve Board, he had positive things to say about gold and the gold standard. Not any more.

This is what he told Kiernan:

[T]here’s been a little bit of a brouhaha about my gold standard thing. You know, look, I think I’m not in favor of a gold standard, although I actually think some of the criticism of the gold standard is overstated, in my opinion, but I think there are problems with the gold standard and I’m not in favor of it.
He also had this to say:
Well, I forget whether I had this conversation with you or someone else the other day…And anyway, we had a big conversation about what do you think about the 2 percent, you know, (consumer-price index, personal-consumption-expenditures price index 2% inflation) target. And I’m comfortable with that.
Which means Paul Volcker would consider him a price inflationist.

Volcker wrote in his memoir, Keeping At It: The Quest for Sound Money and Good Government:
More recently, a remarkable consensus has developed among central bankers that there’s a new “red line” for policy: A 2 percent rate of increase in some carefully designed consumer price index is acceptable, even desirable, and at the same time provides a limit.
I puzzle about the rationale. A 2 percent target, or limit, was not in my textbooks years ago. I know of no theoretical justification. It’s difficult to be both a target and a limit at the same time. And a 2 percent inflation rate, successfully maintained, would mean the price level doubles in little more than a generation.
He has also flipped on free trade.

From the interview:
Anybody who reads my book or has read my writings knows that in many areas I’ve publicly disagreed with the – with the president: on trade...
Although I will say, you know, to give Trump his due, he has really changed some of my thinking on trade.
Bottom line, Murray Rothbard warned that Alan Greenspan was just a "philosophical" free marketer and would never be in favor of free market policy in practice the real world. Moore appears to be exactly the same. Rothbard wrote:
There is one thing, however, that makes Greenspan unique, and that sets him off from his Establishment buddies. And that is that he is a follower of Ayn Rand, and therefore "philosophically" believes in laissez-faire and even the gold standard. But as the New York Times and other important media hastened to assure us, Alan only believes in laissez-faire "on the high philosophical level." In practice, in the policies he advocates, he is a centrist like everyone else because he is a "pragmatist."...
Greenspan is only in favor of the gold standard if all conditions are right: if the budget is balanced, trade is free, inflation is licked, everyone has the right philosophy, etc. In the same way, he might say he only favors free trade if all conditions are right: if the budget is balanced, unions are weak, we have a gold standard, the right philosophy, etc. In short, never are one's "high philosophical principles" applied to one's actions. It becomes almost piquant for the Establishment to have this man in its camp...
Greenspan's "philosophical" Randianism will undoubtedly fool many free market advocates into thinking that a champion of their cause now perches high in the seats of power. 

1 comment:

  1. "Although I will say, you know, to give Trump his due, he has really changed some of my thinking on trade."

    How shallow a thinker (or how much of an ass-kisser) does one have to be to credit Trump with changing one's thinking on anything substantive?