The monetary economics of Ron Paul
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.