The monetary economics of Ron Paul

by on December 20, 2007 at 7:21 am in Economics | Permalink

Here, here, and here.  I agree all around, noting only that inflation does, for mysterious reasons, seem to be a slight tax on savings (nominal interest rates don’t adjust completely to inflationary expectations, but don’t ask me why not).  But that doesn’t change the overall argument very much.  I’ll put the main point yet another way: with a commodity standard the money supply is often pro-cyclical, shrinking during business downturns.  Who wants to risk that?

I haven’t followed Ron Paul closely, and while I like many of his libertarian ideas, I am discomforted by his overall anti-intellectual demeanor.  He strikes me as the kind of person who has a natural attraction to conspiracy theories.  However he is only allowed to believe the ones that coincide with his libertarian ideology.  Which isn’t so many (most of those theories are dreamt up by non-libertarians and thus have anti-libertarian elements), and that means he ends up sounding more somewhat sensible than he really is.

I don’t doubt Paul’s sincerity, but I would like to know his theory of why most economists — even market-oriented ones — don’t agree with him on monetary policy.  I suspect he thinks he knows some secret that others do not. 

There’s what a politician believes, and how a politician believes.  As I get older I put increasing weight on the latter.  As a protest vote, Ron Paul seems fine, but hearing him or reading about him just makes me depressed.  A good rule of thumb is not to get too excited about any candidate whose actual election would make the Dow lose thousands of points.

Addendum: If you’d like a different point of view, here is Alina Stefanescu on Ron Paul.

Chi December 20, 2007 at 7:38 am

Let me be the first of many to say,

Go Ron Paul 2008!!

Away. Far, far away. I will say that even politicians like Paul can up their analysis surprisingly behind the stage. I got a chance to talk to Nader after what should have been an embarrassingly naive oratory, and he’s perfectly willing to hedge and justify in person. Perhaps if his audience changed, he’d be capable of a different level of discourse.

Michael Blowhard December 20, 2007 at 7:57 am

But it’s the “mainstream” candidates who look like a bunch of fanatics and cranks to me …

More seriously, I think there’s a lot of value in the presence of people like Ron Paul, especially if/when there’s no particular reason to root for any of the respected candidates. The presence of people like Ron Paul force certain questions to the surface; they make certain conversations happen that wouldn’t happen at all otherwise. They help keep the other candidates a little more honest, they force the media to take on a few issues (and register a few basic facts about the populace) that they wouldn’t otherwise. They’re a way of letting a little fresh oxygen into the larger political exchange. Bravo to that.

Matt C. December 20, 2007 at 8:52 am

Here is Tyler’s colleague’s take on Ron Paul’s monetary beliefs.

Pete Boettke’s take on the criticism of Ron Paul’s monetary beliefs

Also, Ron Paul is heavily influenced by Lew Rockwell and the rest down at the Mises Institute. Rothbard did argue persuasively that a commodity standard would be better than the fickleness of a central bank. As Rothbard points out the main problem with commodity markets has been government’s interference on not providing the protection for 100% reserve banking.

cvd December 20, 2007 at 9:39 am

Here’s a response, which shares my concern that libertarians should be wary of the huge amount of government control that is required to manage the money supply

Jeff H. December 20, 2007 at 9:53 am

Hey Tyler, why don’t nominal interest rates adjust completely to–oh, wait.

Never mind.

Jarick December 20, 2007 at 10:26 am

Oh, and another benefit about Ron Paul’s candidacy:

We’re talking about real issues, not just talking points.

John Pertz December 20, 2007 at 10:38 am

Jarick said:

“Oh, and another benefit about Ron Paul’s candidacy:

We’re talking about real issues, not just talking points.”

Even if Paul is right or wrong, this is absolutely the most positive development as a result of his candidacy. Every discussion about Paul centers around his beliefs and not the extemporaneous stuff.

Ally Kendall December 20, 2007 at 10:46 am

The idea of rule of law, with equality before the law, is a pretty compelling one. There are no other candidates who are willing to stand for justice and liberty. That’s pretty simple. Game over. Need more? Everyone else advocates selling our children into slavery. Really. Get real. Look at the budget. The dollar is worth about 5% of what it was worth before it was turned over to private bankers, and that massive century-long robbery is just a weak foreshadowing of the collapse occuring today. By 2020, the dollar will be worth less than 20% of what it is worth today. Essentially all of the wealth of the US is being drained into Europe and China at an ever-increasing rate. This is inherently unsustainable, of course. Ron Paul FTW.

I strongly advocate backing the currency with a rolling basket of futures to insure that the PPI is always flat.

Eric December 20, 2007 at 10:58 am

Tyler,

I’m no professional economist; I have a difficult time understanding fiat money vs. gold standard. It seems like whatever I’m reading at the moment makes sense. This is Greenspan’s (in)famous treatise on the virtues of the gold standard:

http://www.gold-eagle.com/greenspan011098.html

Can you comment? Thanks

Cynical Masters Student December 20, 2007 at 11:30 am

@Ally Kendall: A flat price index only works if you have totally unsticky prices for everything. It does not work with wage rigidity very well (and many wages are nominally rigid to some extent), if you have wages that are nominally rigid, some inflation may over time in fact be beneficial as it allows relative prices to be fixed.

Jarick December 20, 2007 at 12:13 pm

@Lee: that’s exactly the kind of comments I’m referring to. What exactly is it about libertarianism that no only precludes mental deficiency in your mind but also criminality? I’m assuming you’re just trying to be humorous, but either way, it doesn’t move the ball forward.

Kris December 20, 2007 at 12:25 pm

The other thing is that there is a difference between Paul’s view that a monetary system is a better system than a centrally controlled system, and his views on how he expects to change monetary policy if he were to be elected president. He has said many times that he doesn’t advocate trying to dismantle the FED once in office because doing so would be impractical. At most, he wants to legalize competing currencies. What he would likely do as president is be a cautionary voice and influence with regards to fiscal policy and against reckless monetary expansion. Would it be so bad to have a president that has conservative views on monetary policy? If Paul has one failing as a candidate, it is that he makes it very difficult to determine the difference between his idealogical positions and his practical ones. Other candidates present very clearly that their idealogical and practical policy positions are one in the same, even though they likely are not. Paul often falls into the trap of allowing his ideals speak for his policy. For instance, social security is a bad long-term program, and Paul acknowledges that, but many think he wants to deep-six social security when in actuality he has the only practical plan for saving it.

John V December 20, 2007 at 12:29 pm

Dr. Cowen,

I see a positive corollary in your post:

I haven’t followed Ron Paul closely…….He strikes me as the kind of person who has a natural attraction to conspiracy theories.

It’s quite common. I suggest you read him a little more closely for a few days and ask yourself if he still strikes you this way.

On a side note, I find funny to watch a libertarian economist giving a “tsk tsk wag of the finger” to someone like Paul who is probably the only man in Congress who is well read many works from Mises to Hayek to Bastiat (Works that I’m sure you are familiar with and have read during your career).

Well, then I ask you, Dr. Cowen:

If the only Congressman in the U.S. who even has a clue about these great works (that I’m sure are part of your own rearing) doesn’t get it, where did he go wrong and where did you right??

If the only Congressman in U.S. who could actually sit down with you and speak intelligently and at length about economic history and thought and Austrianism with you is dead wrong or misguided, then what does that say about all us who read your blog and Boettke’s and Boudreux’s and so on? Should we just stop and pick up some new material??

Please explain….

G December 20, 2007 at 12:55 pm

@Cliff, yeah, the author’s points are very superficial, especially “Why not competing currencies?” (I don’t think she has read the legal tender laws very closely, or the little print on the back of Fed notes).

I’d still like someone to explain to me how economists can accept that prices coordinate economic actions, while not accepting that artificially altering the price to borrow money would produce discoordination. Everyone knows that all business, engineering, finance and other undergraduate majors are taught in nearly every University in the country to use the rate of interest to choose between future outcomes (present-worth analysis, and so forth). Am I the only one that sees a lot of cognitive dissonance here?

Bill Kruse December 20, 2007 at 1:02 pm

Easily the WORST sentence I’ve read today:

“A good rule of thumb is not to get too excited about any candidate whose actual election would make the Dow lose thousands of points.”

Several of the Dow components are surely much higher than they otherwise would be due to some of the deeply corrupt practices that Ron Paul keeps pointing to, especially in foreign and monetary policy. Other Dow components may be harmed by these practices, but please tell me why the Dow thing is such a “good rule of thumb?”

Michael 21yo December 20, 2007 at 1:09 pm

If you dare to read the specifics of the polls, Ron Paul has the highest ration of college graduates than any other candidate with a 2:1 ration, oddly enough quite the opposite with Huckabee who has less than a 1:2 ration.
I find it interesting that Ron Paul is not mentioned when it comes to straw polls. He has won over half of the nations straw polls and some polls are even canceled halfway in (SF Straw Poll) because they know he would win. Which would you consider more accurate, the accumulation of all straw polls in the USA or some telephone poll that is obsolete?
John Kerry had 4% in the polls days before he won the nomination. Carter and Reagan both had 1-2% in the polls, yet won. How do you explain that based on your perception that tele polls are accurate? Ron Paul broke the all time one day fundraising record (EVER) and is bringing in 20 million this quarter, quite possible more than quadruple any of the other front runners. Can you please stop the bias and get real?

Dave December 20, 2007 at 1:22 pm

I would like to respond to your concerns stated in this sentence:

“I don’t doubt Paul’s sincerity, but I would like to know his theory of why most economists — even market-oriented ones — don’t agree with him on monetary policy. I suspect he thinks he knows some secret that others do not.”

You really have to name names here. The truth is that many economists agree with Paul’s proposed economic and monetary policy. Some traders who consider themselves knowledgeable may not agree, but they aren’t economists.

All depends on which school of economics they follow. Paul, like myself, believe strongly in the Mises school of economics which favors free markets and commodity-backed currency. However, our nation has embraced Keynesian economics and a fiat currency for the last 100 years. Now we’re headed rapidly going down the tubes.

Many famous economists have been railing against following our current fiat system for years including Alan Greenspan (before he becamne Fed Chairman). Bottom line is that you really need to read more on economic theory and who supports what. You will not get unbiased information watching Bloomberg TV or CNBC.

Andrew December 20, 2007 at 1:29 pm

Nice synopsis Kris. I for one am a 32 year old Ron Paul supporter. I read what I can find about monetary policy and The Fed, but since this isn’t my day job, it’s not as much as it should be.

Fed chairmen don’t have their own resources on the line, and Greenspan was notriously politically motivated. Maybe Ben got the job because he’s apolitical. Ahem.

In theory, individuals acting rationally should smooth things out. Why don’t they? Why do we still have cycles and bubbles? Well, Mises says it’s because the one thing that all business is denominated in, dollars, is monopoly controlled by bureaucrats. And everyone spends much of their time trying to predict what the committee will do, and the committee tries to predict what people are predicting the committee to do. And the committee tries to do it out of phase with the general election to avoid too much sunlight. Sounds like a good recipe for cycles to me.

Suffice it to say, that although I’ve only really been serious about the stock market for a few years now, I can benefit greatly from medium-term volatility. How much moreso must the real pros take advantage of it? Are we really to think that there is no regulator capture? This isn’t conspiracy theorism, it’s just plain eonomics, which after all, is human nature.

As Warren Buffett said, when evaluating managers, look for Integrity, Intelligence, and Energy. And if you don’t have the first, the last two will kill you!

Go Ron Paul!

Mike Sproul December 20, 2007 at 1:32 pm

Ron Paul fails to see the difference between the Fed and a counterfeiter. The Fed puts its name on every dollar, holds assets against those dollars, recognizes those dollars as its liability, and stands ready to use those assets to buy back the dollars it has issued. No counterfeiter does that.

Dollars are no more “created out of thin air” than shares of GM stock are created out of thin air.

More at

http://www.csun.edu/~hceco008/realbills.htm

Chip H. December 20, 2007 at 1:41 pm

Interestingly enough, I stopped by the “Ron Paul 2008″ HQ on Wed and picked up a poster for my office.

My comments to the office staff we the following: “Ron Paul will not win but I hope he inspires a number of people to run for office under similar principles. We need a choice. When we talk about Republicans and Democrats, we are typically talking about representatives that believe in big government and reducing your freedoms. The representatives may not mean to do this. This is just a result of their need to solve everything on a national level. We need more “Ron Pauls”!”

In addition, I am really shocked at how poorly Ron Paul is treated in the media. Many have tried to link Ron Paul to about every hate group out there. I also don’t understand why more everyday people don’t embrace his ideas.

Jimmy December 20, 2007 at 1:45 pm

“anti-intellectual demeanor”?

Man.. you’ve got some serious reading to do.

I mean, you can argue with the man on many legitimate things, but this: anti-intellectualism? No, I didn’t see that one coming.

Sean Straus December 20, 2007 at 1:46 pm

Anti intellectual? If Ron Paul is anti intellectual, than you, sir, are braindead. It’s one thing to bash someone, but at least state a case to back up your belief. Ron Paul has been able to convince me through well written and spoken argument. You have done nothing to convince me otherwise.

tz December 20, 2007 at 1:57 pm

The fundamental problem with “monetary policy” is that it is impossible for human beings to resist the temptation to cheat. Expanding the money supply (lowering interest rates) makes things feel good and eases pain, much like cocaine or heroin. Restricting it – even in economic boom times causes pain – like withdraw symptoms.

Remember “Irrational Exhuberance”? Then we got the dot-com bubble – why did all those shell companies have billion dollar valuations? Then it popped, but just before the economy might clear out the deadwood, the too low interest rates created the housing bubble. The Greenspan, now Bernanke “put”. So there is tens of trillions of debt out there that everyone is confident that Bernanke won’t let collapse. But it is too big to bail out now.

Or go back to Reagan and the deficits. During the early ’80s, we had a recession, so they said it was necessary. By 1986 we were booming again, but the deficits WENT UP. Then we had a crash in 1987 because the dollar tanked when the market overextended.

Monetary policy only works one way – to addict people to easy credit. Please, Mr. Pusher, give me more candy. I’ll get off next week, I promise. Kudlow is the perfect advocate. Interest rates go down, Bernanke (earlier Greenspan) was a saint, genius, and whatever other nice thing he could think to call him. Interest rates go up, he’s worse than hitler, destroying the economy, eats widows and orphans.

Gold is a disciplinarian. If there is a boom, it can and should be saved. If there is a bust, then you can spend the saved gold.

No one likes discipline, but consider what is happening and going to happen when this latest credit bubble collapses, we will rediscover what those in 1720 found out – John Law’s Mississippi scheme, and the South Seas bubble – why paper money and central banking always lead to economic hell. And we will likely remember for another 10 generations why human beings need a gold standard.

Tom Bernhardt December 20, 2007 at 1:59 pm

Ron Paul “anti-intellectual?” Whether you agree with Ron or not, he quotes more intellectuals, scholars and academics in one speech than the rest of the candidates combined do in a lifetime. No one else running remotely compares to Ron’s breadth of philosophic, economic and historical knowledge.

Jeff December 20, 2007 at 2:04 pm

“Ron Paul fails to see the difference between the Fed and a counterfeiter. The Fed puts its name on every dollar, holds assets against those dollars, recognizes those dollars as its liability, and stands ready to use those assets to buy back the dollars it has issued. No counterfeiter does that. Dollars are no more “created out of thin air” than shares of GM stock are created out of thin air.”

Mr Sproul – correct me if I am wrong, but doesn’t the Fed count promissary notes as assets? Aren’t dollars debt paper? Do you consider debt paper and promissary notes assets to be held in ledger? When you sign a promissary note, isn’t it turned over to the bank and added to its asset ledger? That is NOT an asset used to buy back dollars it issues. This appears to be pretty obvious money mechanics. There are absolutely no REAL ASSETS backing any currency where a central bank or conglomerate of banks issues debt paper. Thin air is exactly the derivative.

B Reyes December 20, 2007 at 2:06 pm

This idea of commodity money contributing to business cycles bothers me greatly. If anything the fiat money of the Fed causes them just as much if not more.

Is there any question that the loose money and loose interest rates created stagflation, the 1979-1981 recession, the 1991 recession, the tech boom/bust, the credit and real estate boom/bust? (I believe the current booms/busts are getting worse/more frequent now because most economists are now of the monetarist persuasion.)

The current Fed chairman, Ben Bernanke, has said himself that the Fed’s policies in the 1920’s and 1930’s created the Great Depression. (His views about what should have been done, however do differ greatly with what Dr Paul has suggested.)

Lastly, Paul is not anti-intellectual at all. That is a complete mis-characterization. The man is a medical doctor, an OBGYN, a extremely well-read man on all things. Just because you don’t like his arguments philosophically doesn’t make him any less intellectual.

With respect, sir, I ask that you do more research. He has several books out and his congressional website has critiques and essays explaining why he voted yes or no on every bill he’s ever voted on. Thank you.

Sam Grove December 20, 2007 at 2:10 pm

The Fed puts its name on every dollar, holds assets against those dollars, recognizes those dollars as its liability, and stands ready to use those assets to buy back the dollars it has issued.

Who’s gonna put the FED in jail for counterfeiting?
That’s a worthless distinction. The government has established a monopoly. The federal government has no assets except it’s ability to extract wealth from the productive via taxes.

Dollars are created out of cotton, paper and ink. However, printing money is not the same as creating wealth. That is what Ron Paul means by creating money out of thin air.
Government printing of money is just another means for extracting wealth from citizens without the negative perceptions created by raising taxes.

I don’t understand those economists who see little harm in monetary inflation.
Doesn’t it discourage savings?
Doesn’t that encourage dependency on government?
Doesn’t it transfer wealth from the productive to the banking system?
Indeed, doesn’t it require a government monopoly on currency?

How can serious economists discount the observations of the Austrian school?

Toby Wilson December 20, 2007 at 2:15 pm

My personal response is in the next paragraph. First, I have a question: Why would anyone who calls themselves a Libertarian want the government involved in the currency at all? It seems to me that the only legitimate Libertarian policy with regard to money is the one in which all money is private. Why NOT let money compete in the free market without government interference like any other good?

I have several reasons why I am for a hard currency standard: anything else can be easily manipulated by the whims of bureaucrats; fiat money allows the government to easily increase in size and scope by printing money at will; and frankly, as a Christian, I believe that fiat money whose value can be arbitrarily manipulated constitutes dishonesty. The Bible teaches that we should have one set of weights an measures. That sound archaic until you realize that is just means we the grocer should have one scale that he uses as a seller, and another scale that he uses when he is the buyer of goods. Money whose value is consciously manipulated by government for the benefit of either borrowers or lenders, importers or exporters, rich or poor, is simply wrong.

(8?» December 20, 2007 at 2:20 pm

“I haven’t followed Ron Paul closely, and while I like many of his libertarian ideas, I am discomforted by his overall anti-intellectual demeanor.”

As I am discomforted by your projection of the idea that ignorance is knowledge. Which given this demonstration, I consider to be due to your overall anti-intellectual demeanor.

BTW, I haven’t followed you closely either, but this one example is more than sufficient to draw conclusions on, don’t you think?

Meanwhile, thanks for your inadvertent support of Dr. Paul. Nothing, and I mean nothing motivates people quite like being exposed to the ignorance of conventional wisdom.

David Gordon December 20, 2007 at 2:26 pm

Ron Paul “has a natural attraction to conspiracy theories” but doesn’t believe in many conspiracy theories. Isn’t there a simpler explanation for the latter fact than the one suggested in this post, i.e., his natural attraction for belief in conspiracy theories is kept in check by libertarian constraints? What if he doesn’t have such a natural attraction?

kim December 20, 2007 at 2:34 pm

Tyler, people like you make me sad. You probably defend Gov Arnold as an intellectual.Give us a break, or lay off your passive aggressive tacts.We know that you don’t know much.HOT AIR is what you offer. This stance, fake as it is, of insulting people who question 911 or any of the other conspiracy theories…practically 50 % of the world doesn’t believe the official story regarding 911. guess “we all crazy folk”. Piss off!!

BoMar December 20, 2007 at 2:42 pm

I can’t believe that I read such a thing. The author first admits, that he is posting an opinion on Ron Paul that is not based on sufficient knowledge about Ron Paul. Which is, I would say, an anti-intellectual action: talking without knowing. And then, having made this admission, he proceeds to tell us that Ron Paul is “anti-intellectual.” Oh, by the way, the same Ron Paul who seems to have read more books than all his MSM interviewers together.

I guess, if only Dr. Paul could stop talking common sense and kinda make peace with the Establishment… That would make him “intellectual,” right?

CK December 20, 2007 at 2:50 pm

Three links to Megan McCardle is supposed to prove that Ron Paul is an anti-intellectual.
It is too laugh.

Dwight December 20, 2007 at 2:53 pm

“..he is only allowed to believe the ones that coincide with his libertarian ideology. Which isn’t so many..” They isn’t? Is attrocious grammar okay now in “intellectual” circles?

As for why economists disagree with him, perhaps it is because government funding at universities where the mercantilist agenda is not upheld would dry up in an instant. Perhaps that has something to do with it. Proving, of course, that it really is all about money.

lucas December 20, 2007 at 3:01 pm

are you that naive? Just a slight tax on savings? A good portion of this country’s people cannot afford a slight tax. I noticed recently that the price of o.j. is up 20%,bread 15% and there have been other large increases in many other food prices. You talk about Wall Street as if it is the only place that matters. Yet you seem to either be unable or refuse to see the real scope of this country’s financial and yes social problems. 69% of our economy is spending,60% of our consumer goods are made overseas, we carry huge trade; budget deficits, agiant national debt + its interest.
Most jobs generated nowadays are low paying service types. We are fighting a war that is consuming vast resources. Of cousre there is CHINA(big,huge,ravenous, country eating CHINA. Oil is at an all time high(its is winter),most people do not have adequate savings. and then there is this mortgage problem. Who gets to pay this one off,why it the taxpayer. Why does the taxpayer, who do not make these mistakes have to foot the bill? Why is this great system which forces the taxpayer to bail rich people out acceptable? Its bad enough that those wonderful people in the stock market who make all the money, force us to by products that we can get no where else any more and now they are shipping many, many of the best manufacturing and other good jobs overseas. This the best system Right?There many other problems also.
It is kind of funny this started happening just about the time Nixon officially disconnected us from gold. maybe if we did pay for things in gold(Ron Paul would like competing currencies) the government would think twice about its monetary policies. If things were paid for in gold do you think any of this bull would exist?
I think not. All of these problems come right back to CREDIT,CREDIT,CREDIT,debt ,debt,debt!
By the way look at the other candidates and look at how much money they have wasted, how many are in debt. I bet they run their campaigns the same way they would run the government. Go ahead take a look at how they have spent money. They stand in contrast with Ron Paul except maybe Huckabee.
I think the main point is people worry so much about the stock market. We are going to get buried by the Chinese and the Indians,Brazilians,Europeans. Just take a look at our educational system and you will understand. This not the same country like it was in 1979 when we had a way out.We still had a strong system but not any more look at the condition of the roads and bridges. All these things are more integrated than ever. None of the candidates have any systemic answers Ron Paul does and if they do not work at least this country will try to solve them together.

Hugh December 20, 2007 at 3:01 pm

This must mean Tyler fashions himself as a cosmopolitan libertarian much like the near great Steve Horwitz.

kim December 20, 2007 at 3:03 pm

sooooo sorry can’t seem to let this “conspiracy” thing go.Tyler is it another kooky conspiracy that Prescott Bush, W’s grandfather, was part of a group of bankers that were busted for helping finance Hitler? this just never seems to see the light of day yet there ARE records proving it. So a conspiracy that can be proved to not be a conspiracy but a FACT are still treated as conspiracies and the people talking or relaying the information just kooks?

John December 20, 2007 at 3:08 pm

If Ron Paul is anti-intellectual, what the heck does that make the rest of the presidential field?

Giulliani thinks shouting “9/11″ amounts to debate about foreign policy, does that make him anti-intellectual?

Scott Pearson December 20, 2007 at 3:32 pm

Oh, and as for the silly comment about the Dow falling: it’s clear that you don’t spend much time listening to CNBC. Among analysts there, there’s no consensus, but I have yet to hear as many investment analysts affirm any other candidate more than they do Ron Paul. Those of us who spend time studying the market know that this wild inflationary policy can’t help. You can’t stimulate an economy into prosperity. THAT was the essence of Friedman’s Monetarist ideal. Somehow that simple truth seems to have been lost on this new generation of economists. Sad.

Brad Petersen December 20, 2007 at 3:37 pm

Ron Paul beliefs are about as close to Tyler Cowen’s philosophy and economics as any serious candidate in the last 50 or 100 years. And that’s not enough? I am simply agog. As for Paul’s monetary views, Tyler may disagree with the Austrian approach, but to pretend they’re some bizarre unfathomable invention of Ron Paul’s strikes me as more than a tad disingenuous.

Praise Jesus December 20, 2007 at 3:40 pm

Praise Jesus…that isolationist Ron Paul is just not very intellectual he is a big naive dummy who doesn’t understand the islamos are going to come over here and make us all wear burkas unless we nuke the heck out of all those idiots over there. We also hae to be very worreid because their alaha might tell them to stop selling us oil so we need to nuke them first…and give them freedom too…are you so selfish that you aren’t willing to killa few million collateral damage folks in order to give some heathens some freedon…so they’l be fre to sell us oil, but not too much oil we don’t want it to flood the market or anything…and we might need to fund some of the bad guys over there to fight for our interest too…it’s just all complicated and ya’ll aren’t intellectual enoguh to understand we need to kill those people they aren’t civil like me and my kin…and what are we gonna do about global warming if we have a billion muslims sending out poison carbon dioxide…you can’t deny that we gotta do something to stop this global warming, might have to nuke a few billion folks anyway…might as well be muslims and if you don’t agree then youa re a terrorist!

baube December 20, 2007 at 3:53 pm

Praise Jesus – Halleluliah! hilarious

punter December 20, 2007 at 4:05 pm

You are so right Tyler, Ron Paul would be a terrible president because the Dow would fall when he is voted in. And on that basis the greatest leader in the world right now is…. Robert Mugabe!!! As Zimbabwe’s stock market is going through the roof.

It is usually easy to call myself a libertarian when I can see that socialists, welfare statists etc are so stupid, but it grieves me that I should associate my beliefs with such a fool as you.

Bill Kruse December 20, 2007 at 4:38 pm

Most of the comments to this post have gone nuts (justifiably so) on Tyler’s remark that Ron Paul comes off as “anti-intellectual.” Perhaps Tyler could clarify by giving us an example of some other politicians who are the “intellectual” type. By the way, does Tyler think that appearing intellectual is good?

To me, it’s maddening that Al Gore, probably the dumbest cluck that EVER held high public office, is routinely portrayed in the media as some kind of intellectual, even a “towering” one. Here’s a guy who stumbled thru college, quickly failed both law school and theology studies, had to have his first book, “Earth in the Balance”, totally ghost-written by Carol Browner, lost 3 consecutive presidential debates to W (and was ridiculed on SNL for this–w so much on the line, don’t you think someone “smart” would correct his mistakes in the first debate and go on to win the next two against a complete dummy?), and apparently doesn’t see the inconsistency in traveling around in a private jet and consuming 20X as much electricity as the average American while telling the rest of us we urgently need to cut way back.

Meanwhile, Ron Paul, who wrote or co-wrote all his material, has medical degree, etc., is somehow “anti-intellectual?” He’s “anti-establishment,” alright; maybe that’s what Tyler really meant. One can hope.

sparklight December 20, 2007 at 4:41 pm

Folks on this thread have set up a false dilemma – a reduction to either an absolute gold standard or an absolute centrally managed fiat currency. This is not the case with Dr. Paul’s position.

Dr Paul advocates the legalization of multiple competing currencies. His policy would not force either a gold-backed currency or a fiat-currency, but would instead legalize competing private currencies subject to the preferences of currency “consumers.” If some folks wished to add a 100% reserve, commodity-backed currency to their portfolio or to faciliate exchange – the option would be available.

Even under the current system, we have several competing “private” currencies, but they are tied to the Fed’s monopoly on money/credit creation. Have you ever heard of Traveler’s Checks? How about credit and debit cards?

Dr. Paul advocates currency choice in the market, not a government enforced “gold standard.”

Person December 20, 2007 at 4:46 pm

Mike_Sproul: I think you have a lot of insights to add, but I’m not sure I follow your claim that Federal
Reserve Notes are a Federal Reserve liability. Precisely which legal obligation, unique to the Fed, does
the Fed gain by issuing these notes? No amount of FRNs will allow me to force the Fed to do anything.
Certainly, it has a reliable promise to maintain currency value and only issue notes in exchange for assets
of equal value. But where is the liability in any of that?

Denis December 20, 2007 at 5:10 pm

Ron Paul is THE most intellectual candidate running for president period. If you don’t think so, then listen to this mp3. http://mises.org/multimedia/mp3/audiobooks/MisesPersonalView.mp3

Floccina December 20, 2007 at 5:18 pm

Tyler,

I wonder if what makes you think Paul is anti-intellectual is not that he is anti-intellectual but that he has a strong pessimistic bias. Although I disagree with his view that we are going to hell in hand basket or that inflation has made us poorer than we were in the 1960s but I agree with all the proposals that he thinks we need to prevent going to hell in a hand basket.

Also Ron Paul represents big changes and big changes is always risky. Tyler you need to task some big risks like going to gold. If it causes a depression, I doublt that would be that bad in this much wealthier world than existed in 1929.

Ed L December 20, 2007 at 5:37 pm

>>I’ll put the main point yet another way: with a commodity standard the money supply is often pro-cyclical, shrinking during business downturns. Who wants to risk that?

Good grief! It shrinks during business downturns because — wait for it — PEOPLE SAVE! Who wants to risk that!? Goodness me! Why risk an economy where people save their money instead of opting for easy credit?! Is that really the question that you’re asking?

Barkley Rosser December 20, 2007 at 5:56 pm

Ummm. Well, it is an historical fact that business
cycles were much more pronounced during the gold
standard era than since it ended. Increasingly the
consensus among economic historians is that it was
overly rigid adherence to the gold standard that played
the crucial role in bringing on the Great Depression,
with the rise of Hitler and the slaughter of millions
following thereon.

For those who think this is baloney, I suggest you read
Barry Eichengreen’s 1992 _Golden Fetters: The Gold Standard
and the Great Depression_. It was not called a
“barbrous relic” for nothing. Good riddance.

Comments on this entry are closed.

Previous post:

Next post: