after the crash of 2008 and the growing realization that Dow 14000 was the product of a cheap-money boom that led to the inevitable bust, maybe it’s time to think about the gold standard or other constraints on politicized money creation.(it is worth noting that Cato was formed and is run by by Edward H. Crane, now from AllianceBernstein and by principals from Koch Industries)
Being inherently anti regulatory, pro business and somewhat paranoid Cato has a natural affinity with tea baggers and other extreme right wing organizations, who they sponsor.
Anyway, the situation where those who purport to be supportive of a free market advocate that a gold standard be imposed as a restraint on making money seems counterintuitive. Not that making sense is a priority in politics, as Matt Yglesias points out, the current price of gold is a reflection on the demand for this limited resource
Nor does gold ensure stable prices. What it ensures is that inflation trends are driven by the supply of gold. Find a new gold mine somewhere: inflation. Aliens come to steal gold: deflation. All you’re doing is randomizing the extent and timing of inflation.Businessmen may be good at servicing customers and making money, often at the expense of their competitors, but are ill equipped to run a national economy which needs to be good for everyone and whose only customer is itself.
