Did Ron Paul "school" Ben Bernanke?

It has been suggested to me that Ben Bernanke has been overpowered by the power of Ron Paul's incredible arguments about money supply during his congressional testimony. Here is one such clip:

Ron Paul's supporters see the might of his common sense slashing through the doubletalk of the financial solons. I see a really, really smart economist responding to Ron Paul the same way you react to Cousin Mildred when she corners you after Christmas dinner to complain about the flouridation of the water supply. What Congressman Dr. Paul is saying doesn't make any particular sense; American consumers are not particularly suffering because of the decline of the dollar, the dollar is not declining because of Fed policy, and the Federal Reserve has nothing to do with a relative scarcity of oil and food, which is what is driving the CPI increases he complains about. If we were on the gold standard, oil and food would still be getting more expensive, and people on fixed incomes would still be feeling the pinch.

Comments

When Burnanke says that only imports are affected by a declining dollar, I wonder what century he is thinking of. Its 2007: Its a global market. I was just reading yesterday that after exporting tens of billions dollars worth of wheat, we risk domestic short-falls and more price hikes over the next year.

We might undertake a lot of Dollar to Dollar transactions in the domestic economy, but that doesn't mean that external competitors aren't offering those producers Euro to Dollar deals instead. It is simply impossible for an American to be un-influenced by the declining dollar.

Now, is Burnanke the one responsible for this? No, I think he's just printing the money that's already been spent by the government and the banks. Failure to do so at this point would probably stop the whole system in a way much worse than the current effect of inflation.

I think Ron Paul understands that this has to be addressed on the spending side, and he really just uses these committee meetings to get Bernanke to admit that inflation is a concern going forward even we all know Burnanke will go to Wall Street tomorrow and tell them rates are coming down again and inflation is in check.

Posted by underground | December 19, 2007 6:16 PM

I agree with a lot what you said, and find the "schooling" to be hyperbole even if Paul was right, but...

If we were on the gold standard, oil and food would still be getting more expensive, and people on fixed incomes would still be feeling the pinch.

Are you sure? The recent "agflation" and oil price increases corresponded directly with a major gold rally. The price gain would, at a minimum, be much smaller.

And, I should add, a gold standard is heaven on earth for those with fixed incomes -- exactly why liberals hate it.

Also: the dollar is not declining because of Fed policy

So the Fed doesn't control the power of the dollar? I remember Mike_Sproul attributing all dollar inflation to the Fed's non-retention of the interest it earns on its government bonds (either through remissions the federal government or spending on operations), but you're going too far here.

Posted by Person | December 19, 2007 6:17 PM

Yes, Megan is correct. Inflation has been relatively low for a long time. And economic growth has benn pretty good. So what is Ron Paul complaining about?

I think it's a problem when people without much formal training in economics decide to become autodidacts and take "Austrian Economics" as the gospel truth. I'm a great admirer of Hayek and Mises (in that order)--Rothbard, not so much. But they were not right about everything. You can't just brush Keynes and Friedman and Samuelson and Solow (and Bernanke) aside as dunces or liars.

Ben Bernanke understands that high and sustained inflation is bad for the economy. I promise you. He will not allow a repeat of the 1970's. I would bet a lot of money on that.

I'll say this for the Ron Paul people, though: I admire their verve. They have a passionate commitment to liberty, and thats good, even if there are some excesses there.

Posted by rwe | December 19, 2007 6:20 PM

"Ben Bernanke understands that high and sustained inflation is bad for the economy."

What about artifically low interest rates, intentionally lowered in an arbitrary manner? Aren't they bad for the economy, too, in a lot of ways?

As I see it, the housing bubble and the NASDAQ crash were both related to artificially low interest rates. With all that cheap cash lying around, people stopped evaluating risk rationally. Since banks were practically giving away money, you'd be crazy not to spend as much money as they'd lend you.

In 2005 I couldn't find a savings account with an interest rate of even 3 percent. But of course housing values were going through the roof (as people borrowed huge mortgages at low interest rates, and went into bidding wars over houses). So instead of saving money, everybody threw it at real estate to make a return on their investment. Except that, obviously, that was a bad idea in the long term . . .

Posted by Phil | December 19, 2007 6:45 PM

Wow, what is your beef with Ron Paul. Anybody familiar with economic theory should at least acknowledge that a commodity-backed currency is a valid mechanism. It's not "crazy" and people who talk about it aren't "insane".

You say "American consumers are not particularly suffering because of the decline of the dollar, the dollar is not declining because of Fed policy".

That's completely false. Lowering the interest rates cause more money to be printed which devalues our currency. Is it noticeable to the consumer? It certainly is at the gas pump, although whether consumers recognize that part of their high gas prices is due to devaluation of the dollar is another issue.

Posted by Matt Abar | December 19, 2007 7:04 PM

whether consumers recognize that part of their high gas prices is due to devaluation of the dollar

Huh??? Oil is priced in dollars on the world market; how does a dropping dollar inflate oil prices?

Posted by Rob Lyman | December 19, 2007 7:12 PM

"What about artifically low interest rates, intentionally lowered in an arbitrary manner? Aren't they bad for the economy, too, in a lot of ways?"

What's artificial? The Fed targets interest rates now rather than monetary aggregates, but the crucial test of Fed policy is this: Has inflation been high or volatile? And the answer is no. Inflation has been neither high nor volatile. So the Fed has been doing a good job on the whole. Were interest rates too low for too long? Maybe. But the responsibility lies with Alan, not Ben.

"In 2005 I couldn't find a savings account with an interest rate of even 3 percent. But of course housing values were going through the roof (as people borrowed huge mortgages at low interest rates, and went into bidding wars over houses). So instead of saving money, everybody threw it at real estate to make a return on their investment."

Again, maybe Alan was mistaken. He might have helped to fuel the housing bubble. The Economist's arguments about an asymmetric monetary policy have merit, in my view. Nonetheless, one has to concede that the last 25 years have been a long period of steady growth and low inflation. So again I ask: what is Ron Paul complaining about?

Posted by rwe | December 19, 2007 7:17 PM

Bernanke looks like a fool saying "only imported goods will get more expensive" - OIL is an imported good. Much of our FOOD is imported. Have you looked at COPPER or NICKEL lately?

Megan - if you take a peek outside the US, you will discover how devastating our dollar devaluation is to us. Our LAND is being bid up through foreign investors (I'm in commercial real estate) willing to pay in Euros/ Canadian $/ Rupees/ Yuan for cheap US-Dollar denominated assets.

Capital markets are GLOBAL. How anybody with a shred of common sense thinks a weak currency is a good thing, is beyond my imagination. Do you think its good or bad that our buying power for global goods is WEAKENING?

CPI as measured by govt is a lagging indicator and a meaningless one - as Milton Friedman said 'Inflation is always and everywhere a monetary phenomenon'. The only way you can measure inflation is through growth in the money supply. And our money supply is growing on steroids.

Why do you think commercial real estate has outpaced any other broad asset class for the last 100 years? Why do you think LBO firms make such ungodly sums? Do you think paying debts with inflated dollars might have anything to do with it?

Oh and BTW, I'm an Indian immigrant and I support Ron Paul (so much for his 'anti-foreign' bias).

Posted by Rahul | December 19, 2007 7:53 PM

PS. Extra credit question: Why do so many countries peg their currencies to the dollar? Why do you think so many of them are now moving to 'dollar band' pegs? Why do you think the price of oil was historically denominated in dollars? Why do you think that is changing?

Posted by Rahul | December 19, 2007 7:58 PM

Sorry for multiple posts - I don't mean to sound like a jackass in my comments, its just that I do think of inflation as unavoidable and invisible taxation, and my beef is with Bernanke, not Ms McArdle, who has a fascinating blog.

Posted by Rahul | December 19, 2007 8:01 PM

"Oh and BTW, I'm an Indian immigrant and I support Ron Paul (so much for his 'anti-foreign' bias")
>>
Um, personally, I don't think Paul is anti-foreign in any drastic way, but this statement doesn't prove anything. All it demonstrates is that YOU don't have an anti-foreign bias. You could like him for all of the other things he stands for, despite his anti-foreign bias (if he has one).

Posted by Dean Moriarty | December 19, 2007 9:15 PM

Megan,

He is not talking about the supply of goods, he is talking about the buying power of the dollar that is being propped up by an increased debt. Every dollar that we take from the FED has to be payed back with interest. Every dollar in circulation is based on credit, its a loan.

I don't think the average American understands how we are financing this forigen policy. Simply put, we are taking a mortgage out on the COUNTRY!

Its like that idiot that calls his bank to complain that his check bounced...

"What do you mean I'm out of money....I STILL HAVE CHECKS LEFT!!!"

Posted by Andrew | December 19, 2007 10:47 PM

While I do not think Ron Paul "schooled" Bernanke, Bernanke's replies weren't all that convincing either.

While there is admittedly some amount of rhetoric and ideological bias in the otherwise very intelligent comments Paul was making, I find that the Fed chairman did not refute Paul to any sound degree at all.

Posted by Jon Perez | December 19, 2007 11:27 PM

What goes up must come down. Like so many astute people (economists included) have been observing - only one of which is Ron Paul - Americans have been living on debt for so long that the US dollar just has to come crashing down. If the US were on the gold standard, Americans would not be enjoying the debt-based "prosperity" they now do, but neither will the country be in as serious debt doo-doo as it is in right now.

The book "Empire of Debt" comes to the same conclusions and it has nothing to do with Ron Paul. Jim Rogers, yet another respected voice, says pretty much the same thing. And if you parse Greenspan properly, you will see that he pretty much does not disagree with such viewpoints either.

Posted by Jon Perez | December 20, 2007 2:33 AM

Nonetheless, one has to concede that the last 25 years have been a long period of steady growth and low inflation. So again I ask: what is Ron Paul complaining about? - rwe

I'm not sure why Paul thinks what he thinks, since he's held these views for a long time, apparently. But I imagine part of the reason why it's catching on now is similar to the way people with persistent addiction problems grab at strange, irrelevant, and somewhat magical solutions, rather than grappling with their addictions head-on. The US does face serious economic problems at the moment: wage stagnation for everyone below the top quintile; the housing, subprime mortgage, and CIV mess; the rapidly falling dollar; and so on. Most of these problems are the result of long-term bad habits coming home to roost -- basically spending and borrowing too much, and saving too little. Changing those bad habits will be painful, and requires slow, steady, unenjoyable restraint and work. People don't like to face those kinds of problems head-on; instead they prefer to grasp at magical solutions, even ones that don't have anything to do with the actual problems.

If you've ever heard an addict talk about how they're sure they could kick if they just moved to a new house, or someone with a weight problem who drinks too much and doesn't exercise talk about how they think they're allergic to wheat gluten, you're hearing something similar to people in the US now saying the big economic problem is that we're not on the gold standard.

Posted by brooksfoe | December 20, 2007 5:46 AM

Here's the angry letter Ms. Megan McArdle knew she was bound to receive. Before I launch into my main topic, I want to make a few matters crystal-clear: (1) Ms. McArdle needs a refill of her medication, and (2) as a result of that, I really intend to keep writing letters like this one until Ms. McArdle changes her ways. Now that you know where I stand on those issues, I can safely say that Ms. McArdle is obviously up to something. I don't know exactly what, but she recently claimed that two wrongs make a right. I would have found this comment shocking had I not heard similar garbage from her a hundred times before. She says that she can change her evil ways. That's a stupid thing to say. It's like saying that her hypnopompic insights are Holy Writ.

If you'll allow me a minor dysphemism, Ms. McArdle offers nothing but cheap insults and banal rhetoric. Or, to phrase that a little more politely, Ms. McArdle's wisecracks are propaganda to the point of comedy and are so easily refuted as to render them useless even as such. That conclusion is not based on some sort of complacent, ill-natured philosophy or on Ms. McArdle-style mental masturbation, but on widely known and proven principles of science. These principles explain that if we don't improve the physical and spiritual quality of life for the population at present and for those yet to come, our children will curse us in our graves. Speaking of our children, we need to teach them diligently that the only effective and responsible course of action is to restore the world back to its original balance -- an often frustrating prescription, to be sure. To say anything else would be a lie.

Should we sit back and let Ms. McArdle set the hoops through which we all must jump, or should we give you some background information about her? That choice sure sounds like a no-brainer to me. She wants me to stop trying to champion the poor and oppressed against the evil of Megan McArdle. Instead, she'd rather I burst into tears. Sorry, but I don't accept defeat that easily. While I agree with others' assessment that there is no honor in her opinions, still, I find it necessary, if I am to meet my reader on something like a common ground of understanding, to point out that when I say that her rantings are irritable, I mean it. I don't mean that they remind me of something irritable or that they have one or two irritable characteristics. I mean that they are irritable. In fact, the most irritable thing about them is the way that they prevent people from seeing that I admit I have a tendency to become a bit insensitive whenever I rebuke Ms. McArdle for trying to rewrite and reword much of humanity's formative works to favor ruffianism. While I am desirous of mending this tiny personality flaw, some people apparently believe that if we don't bother Ms. McArdle, Ms. McArdle won't bother us. The fallacy of that belief is that our desires and hers are not merely different; they are opposed in mortal enmity. Ms. McArdle wants to demonstrate an outright hostility to law enforcement. We, in contrast, want to alert people that if she makes fun of me or insults me I hear it, and it hurts. But I take solace in the fact that I am still able to detail the specific steps and objectives needed to thwart her saturnine schemes.

Ms. McArdle insists that unsympathetic, anti-democratic Luddites are more deserving of honor than our nation's war heroes. How can she be so blind? Very easily. Basically, if you're interested in the finagling, double-dealing, chicanery, cheating, cajolery, cunning, rascality, and abject villainy by which Ms. McArdle may sensationalize all of the issues quicker than you can double-check the spelling of "counterexcommunication", then you'll want to consider the following very carefully. You'll especially want to consider that there may be nothing we can do to prevent Ms. McArdle from making good on her word to curry favor with the most scabrous layabouts I've ever seen using a barrage of flattery, especially recognition of their "value", their "importance", their "educational mission", and other petulant nonsense. When we compare this disturbing conclusion to the comforting picture purveyed by her intimates, we experience psychological stress or "cognitive dissonance". Our only recourse is to balkanize Ms. McArdle's abhorrent polity into an etiolated and sapless agglomeration.

Ms. McArdle maintains that her vices are the only true virtues. This is hardly the case. Rather, there is growing evidence that says, to the contrary, that her hagiographic adoration of Fabianism is indubitably sickening. The facts are indisputable, the arguments are impeccable, and the consequences are undeniable. So why does she aver that she can override nature? To rephrase that question, where do we go from here? Well, we all know the answer to that question, don't we? But in case you don't, then you should note that she wants to prohibit any discussion of her attempts to perpetuate the myth that she acts in the name of equality and social justice. While it is clear why she wants that to be a taboo subject, Ms. McArdle claims to be fighting for equality. What she's really fighting for, however, is equality in degradation, by which I mean that Ms. McArdle maintains a "Big Brother" dossier of information about everyone she distrusts, to use as a potential career-ruining weapon. Is your name listed in that dossier? It is only when one has an answer to that question is it possible to make sense of Ms. McArdle's exegeses because Ms. McArdle's slaves all have serious personal problems. In fact, the way she keeps them loyal to her is by encouraging and exacerbating these problems rather than by helping to overcome them.

Who is behind the decline of our civilization? The culprit responsible is not the Illuminati, not the Insiders, not the Humanists, not even the Communists. No, the decline of our civilization is attributable primarily to Megan McArdle. Sure, she talks the talk but does she walk the walk? My best guess, for what it may be worth, is based on two key observations. The first observation is that her secret agents coerce children into becoming activists willing to serve, promote, spy, and fight for her stratagems. The second, more telling, observation is that Ms. McArdle takes things out of context, twists them around, and then neglects to provide decent referencing so the reader can check up on her. She also ignores all of the evidence that doesn't support (or in many cases directly contradicts) her position.

The only way that Ms. McArdle could convince me that her opinions represent the opinions of the majority -- or even a plurality -- would be to feed me stupid-flakes for breakfast, at least insofar as this essay is concerned. She drops the names of famous people whenever possible. That makes Ms. McArdle sound smarter than she really is and obscures the fact that we can divide her excuses into three categories: argumentative, squalid, and capricious. So, does she believe, deep in the adytum of her own mind, that the purpose of life is self-gratification? I guess it just boils down to the question: Is she hoping that the readers of this letter won't see the weakness of her argument relative to mine? If you maintain that we should all bear the brunt of Ms. McArdle's actions then you won't understand my answer no matter how carefully I explain it. You won't understand my answer if you think that Ms. McArdle holds a universal license that allows her to poison the relationship between teacher and student. However, you have a chance at understanding my answer if you're open-minded enough to realize that I am deliberately using colorful language in this letter. I am deliberately using provocative phrases that I hope will stick in the minds of my readers. I do ensure, however, that my words are always appropriate and accurate and clearly explain how Ms. McArdle's ultimata are worse than the Black Death of olden times. Let's be sure that I've made myself absolutely clear: Ms. McArdle is wallowing in the sty of snobbism. That shouldn't surprise you when you consider that people often get the impression that the most mendacious publishers of hate literature you'll ever see and Ms. McArdle's cohorts are separate entities. Not so. When one catches cold, the other sneezes. As proof, note that Ms. McArdle's roorbacks are more than just self-aggrandizing. They're a revolt against nature.

Contrary to what Ms. McArdle would have you believe, I've heard her say that making my blood curdle is essential for the safety and welfare of the public. Was that just a slip of the lip, or is Ms. McArdle secretly trying to censor by caricature and preempt discussion by stereotype? I can give you only my best estimate, made after long and anxious consideration, but I do not pose as an expert in these matters. I can say only that just because she and her yes-men don't like being labelled as "spleeny, bloodthirsty lummoxes" or "surly analphabetics" doesn't mean the shoe doesn't fit. If she had her way, schools would teach students that the moon is made of green cheese. This is not education but indoctrination. It prevents students from learning about how Ms. McArdle has been trying to raise funds for scientific studies that "prove" that principles don't matter. This is what's called "advocacy research" or "junk science" because it's funded by lamebrained, loathsome fugitives who have already decided that trees cause more pollution than automobiles do.

We must learn to celebrate our diversity, not because it is the politically correct thing to do but because if I want to turn to a life of crime, that should be my prerogative. I decidedly don't need her forcing me to. Astute observers have known for years that the very genesis of Ms. McArdle's bumptious proposed social programs is in credentialism. And it seems to me to be a neat bit of historic justice that she will eventually herself be destroyed by credentialism. What conclusion should we draw from Ms. McArdle's imprecations? How about that two wrongs don't make a right? Although Ms. McArdle would rather I discuss the personality flaws of unwed, pregnant teenagers, I oppose her communiqués because they are stubborn. I oppose them because they are picayunish. And I oppose them because they will waste our time and money sooner than you think.

By the bye, Ms. McArdle claims that ebola, AIDS, mad-cow disease, and the hantavirus were intentionally bioengineered by villainous election-year also-rans for the purpose of population reduction. That claim is preposterous and, to use Ms. McArdle's own language, overtly disorganized. No history can justify it. This is what her subalterns try to prevent us from hearing about on radio and television or reading about in popular magazines and large-circulation papers. There's nothing controversial about that view. It's a fact, pure and simple. It was a fact long before anyone realized that Ms. McArdle should clarify her point so people like you and me can tell what the heck she's talking about. Without clarification, Ms. McArdle's jeremiads sound lofty and include some emotionally charged words but don't really seem to make any sense. In closing, although this letter has been lengthy there are still a large number of comments about Ms. Megan McArdle that I have had to leave aside. I didn't even begin to mention, for instance, that her legatees are cut from the same mold as the most pouty nobodies you'll ever see. Anyway, the important point is that my empirically validated theory is that Ms. McArdle's acrimonious homilies are part of the workforce training agenda for the global planned economy.

Posted by Mick Russom | December 20, 2007 5:54 AM

I just love how these Paulians come out in droves. It's really the best entertainment out there.

Posted by Mr. Bingley | December 20, 2007 7:45 AM

A lot of Ron Paul comment spam originates from Ukrainian IP addresses. You have to wonder why that is and who is actually bankrolling his campaign.

And BTW, Mick, thanks for demonstrating in spades why Paul, er, the Reverend Dr. Paul, or whatever you want to call him, won't draw mainstream votes. In short, too many of his loyal supporters are stark raving mad. Has it occurred to you that extreme violence in emotions and rhetoric and an absolutist insistence that you possess gnostic knowledge of One True Way gives you more in common with crackpot authoritarians, than it does with modest and moderate advocates of libertarian thought such as Hayek and Friedman? Treating other belief systems as heresy rather than reasonable policy choices that people can come to honestly gives you more in common with the Dominicans of the Inquisition(s) than it does with mature actors in a representative Republic.

Posted by Al Maviva | December 20, 2007 7:55 AM

Thank Bill Gates or God for the page down key...

By the way, lowering interest rates does not cause money to be printed. Spending by the congress causes money to be printed.

Posted by Butch McGoo | December 20, 2007 7:59 AM

Anyone interested in Ms. McArdle's scholarship on financial policy need only look at her lack of resume - an MBA and a summer internship at an investment bank. Having a blog, even one hosted by a somewhat-major media outlet, doesn't make one an expert. Accordingly, Ms. McArdle's amateur opinions here are easily dismissed.

Posted by Jeff R | December 20, 2007 8:15 AM

Mick Russom | December 20, 2007 5:54 AM

I stopped reading at the "mental masturbation" part.

If this were FARK thread, I'd link to the "Internet Toughguy Magazine" pic. But as you may not have noticed, this isn't FARK.

Posted by Protagonist | December 20, 2007 8:37 AM

I have to agree with Jon Perez here. Though we haven't seen that much between Bernancke and Rep. Paul, the exchanges between he and Greenspan were somewhat telling. Of course without saying as much, it seemed like Greenspan was telling Paul that he's playing the hand he was dealt and admitting to Paul he was right would do little besides open the door to a lot of questions the Chairman didn't need to spend his time answering.

Did Paul expect Greenspan to say, "Okay, you got me. It's a house of cards we're living in and the only way it stands is if we all believe it will continue to stand. Satisfied?"

Posted by spongeworthy | December 20, 2007 8:40 AM

Huh??? Oil is priced in dollars on the world market; how does a dropping dollar inflate oil prices?

The dollar that passes into, say, Saudi hands now buys less when spent in, say, France. So the Saudi's want more of them.

Posted by PersonFromPorlock | December 20, 2007 8:54 AM

Regarding the reference to "a heartbreaking work of staggering genius," that post was obviously created by an automatic complaint generator on the Web. Probably this one:

http://www.pakin.org/complaint

Posted by Mike Koenecke | December 20, 2007 9:10 AM

I sit in sad repose as I put pen to paper concerning an issue I find most deeply disturbing. To begin at the beginning, Dr. Ron Paul promises his pals that as soon as he's finished destroying our moral fiber, they'll all become rich beyond their wildest dreams. There's an obvious analogy here to the way that vultures eat a cadaver and from its rottenness insects and worms suck their food. The point is that Dr. Paul has found a way to avoid compliance with government regulations, circumvent any further litigation, and till the egocentric side of the totalitarianism garden -- all by trumping up a phony emergency. Relative to just a few years ago, what I call petulant libertines are nearly ten times as likely to believe that honesty and responsibility have no cash value and are therefore worthless. This is neither a coincidence nor simply a sign of the times. Rather, it reflects a sophisticated, psychological warfare program designed by Dr. Paul to defy the law of the land.

By the bye, I once told Dr. Paul that he is the type of person who would shoot you just to see if his gun worked. How did he respond to that? He proceeded to curse me off using a number of colorful expletives not befitting this letter, which serves only to show that I welcome Dr. Paul's comments. However, Dr. Paul needs to realize that people used to think I was exaggerating whenever I said that he is a mythmaker, an illusion builder, or to put it less politely, a trickster. After seeing Dr. Paul cause riots in the streets these same people now realize that I wasn't exaggerating at all. In fact, they even realize that Dr. Paul's disciples tend to fall into the mistaken belief that the majority of soporific dossers are heroes, if not saints, mainly because they live inside a Dr. Paul-generated illusion-world and talk only with each other.

Don't get me wrong; Dr. Paul's ignorant attempts to debunk myths often lead to the perpetuation of them. But Dr. Paul is guilty of a shocking display of dishonesty and sophistry. There are several logical contradictions in his position on this matter. For example, Dr. Paul has allowed himself to become a spokesman for the same point of view shared by dissolute, complacent morons, deceitful freeloaders, and chthonic, polyloquent-to-the-core blockheads while masquerading as an outspoken radical bucking the system. Ever since he decided to inflict untold misery, suffering, and distress, his consistent, unvarying line has been that he can scare us by using big words like "anthrohopobiological". Doesn't Dr. Paul realize that I don't want my community tainted with such blatant solecism? The best answer comes from Dr. Paul himself. That is, if you pay careful attention to his directionless utterances you'll undoubtedly notice that there is a problem here. A large, daft, poxy problem.

Dr. Paul keeps telling everyone within earshot that censorship could benefit us. I'm guessing that Dr. Paul read that on some Web site of dubious validity. More reliable sources generally indicate that it has been said that his game is to place scabrous adulterers (especially the headlong type) at the top of the social hierarchy. I, in turn, avouch that we must admonish him not seven times, but seventy times seven. Our children depend on that. I just want to say that Dr. Paul, with his craftiness and satanic theories, will entirely control our country's exuberant riches eventually. Dr. Paul will then use those riches to suck up to batty, wrongheaded wimps. The moral of this story is that I don't care what others say about him. Dr. Paul's still unrealistic, mean-spirited, and he intends to crush people to the earth and then claim the right to trample on them forever because they are prostrate.

For the sake of concreteness, someone has to be willing to wake people out of their stupor and call on them to tackle the multinational death machine that Dr. Paul is currently constructing. Even if it's not polite to do so. Even if it hurts a lot of people's feelings. Even if everyone else is pretending that Dr. Paul is the one who will lead us to our great shining future.

It's easy for Dr. Paul to declaim my proposals. But when is he going to provide an alternative proposal of his own? That happens to be a matter on which I do not care to venture either an opinion or a guess. I do, however, feel that I should state that Dr. Paul commonly appoints ineffective people to important positions. He then ensures that these people stay in those positions because that makes it easy for Dr. Paul to mute the voice of anyone who dares to speak out against him.

Either Dr. Paul has no real conception of the sweep of history, or he is merely intent on winning some debating pin by trying to pierce a hole in my logic with "facts" that are taken out of context. My next point of order is that if he thinks his announcements represent progress, Dr. Paul should rethink his definition of progress. In the end, the most telling thing is that he claims that dim-witted, self-serving degenerates aren't ever heartless. Predictably, he cites no hard data for that claim. This is because no such data exist. It may sound strange to Dr. Paul when I say that he worships his own ignorance, but one of the goals of statism is to render meaningless the words "best" and "worst". Dr. Paul admires that philosophy because, by annihilating human perceptions of quality, Dr. Paul's own mediocrity can flourish.

Dr. Paul ought to unstop his ears and uncover his eyes. Only then will he hear that to which he has been too long heedless. Only then will Dr. Paul see that he pompously claims that honor counts for nothing. That sort of nonsense impresses many people, unfortunately. He claims that he's the best thing to come along since the invention of sliced bread. I assert that the absurdities within that claim speak for themselves although I should add that we must remove our chains and move towards the light. (In case you didn't understand that analogy, the chains symbolize Dr. Paul's sexist ideals and the light represents the goal of getting all of us to do what needs to be done.)

Whatever your age, you now have only one choice. That choice is between a democratic, peace-loving regime that, you hope, may change the world for the better and, as the alternative, the lackadaisical and moonstruck dirigisme currently being forced upon us by Dr. Paul. Choose carefully because according to Dr. Paul, he is the way, the truth, and the light. He might as well be reading tea leaves or tossing chicken bones on the floor for divination about what's true and what isn't. Maybe then Dr. Paul would realize that he claims that I'm too namby-pamby to send his put-downs into the dustbin where they belong. I would say that that claim is 70% folderol, 20% twaddle, and 10% another lecherous attempt to cause (or at least contribute to) a variety of social ills.

Given Dr. Paul's current mind-set, Dr. Paul rarely tells his grunts that he plans to make a cause célèbre out of his campaign to rewrite and reword much of humanity's formative works to favor unilateralism. Let me recap that for you because it really is extraordinarily important: If we are powerless to shape a world of dignity and harmony, a world of justice, solidarity, liberty, and prosperity, it is because we have allowed Dr. Paul to inaugurate an era of reckless ethnocentrism. His sentiments will have consequences -- very serious consequences. We ought to begin doing something about that. We ought to take up the all-encompassing challenge of freedom, justice, equality, and the pursuit of life with full dignity. We ought to spread the word that if he were as bright as he thinks he is, he'd know that many people respond to his treasonous, predatory philippics in much the same way that they respond to television dramas. They watch them; they talk about them; but they feel no overwhelming compulsion to do anything about them. That's why I insist we invigorate the effort to reach solutions by increasing the scope of the inquiry rather than by narrowing or abandoning it. As this letter draws to a close, I want to challenge you, the reader, to make a genuine contribution to human society. That's what I intend to do until my last breath.

Posted by Ellison Ellensburg | December 20, 2007 9:33 AM

Good call, Mike -- I nearly went blind reading the first couple paragraphs of Mick's post, and now I realize why.

I like how that same computer-generated post simply re-enforced the belief by some that Ron Paul supporters are nuts.

I've found that certain people for some reason only listen to Paul, and Paul supporters' arguments for key points they can foil back and say "this proves you're crazy."

There's no attempt to actually justify all of the things that Paul supporters are disgruntled about with the status quo (interest rate manipulation, identical political parties, constant rampant government spending, the disappearance of local soveriegnty) -- such things are just "normal."

Once Paul is dismissed as "crazy" all of a sudden they have no obligation to actually justify opposing Paul's actual positions. They find a couple pet points they can throw out to prove Paul is "crazy" and then they stop listening.

Posted by Phi | December 20, 2007 9:38 AM

While my better instincts counsel me to follow a policy of laissez-faire, there are a couple of Rep. Ron Paul's statements I feel I cannot let pass. What follows is a call to action for those of us who care -- a large enough number to defy the international enslavement of entire peoples. I guess I really can't blame Ron for wanting to deny the obvious. After all, he thinks that diseases can be defeated not through standard medical research but through the creation of a new language, one that does not stigmatize certain groups and behaviors. However, I regard him the way I would the sort of stinking filth I might have to clean off my boots after a careless walk in a dog kennel. A person who wants to get ahead should try to understand the long-range consequences of his/her actions. Ron has never had that faculty. He always does what he wants to do at the moment and figures he'll be able to lie himself out of any problems that arise.

I like to face facts. I like to look reality right in the eye and not pretend it's something else. And the reality of our present situation is this: I'm sticking out my neck a bit in talking about Ron's allegations. It's quite likely he will try to retaliate against me for my telling you that his solutions always follow the same pattern. He puts the desired twist on the actual facts, ignores inconvenient facts, and invents as many new "facts" as necessary to convince us that coercion in the name of liberty is a valid use of state power.

Ron wants us to emulate the White Queen from Lewis Carroll's Through the Looking Glass, who strives to believe "as many as six impossible things before breakfast". Then again, even the White Queen would have trouble believing that principles don't matter. I prefer to believe things that my experience tells me are true, such as that we must learn to celebrate our diversity, not because it is the politically correct thing to do but because this is a free country, and I, hardheaded cynic that I am, allege we ought to keep it that way. Ron insists that he has no choice but to promote unrestrained ideologies such as cameralism. His reasoning is that he has mystical powers of divination and prophecy. Yes, I realize that that argument makes no sense, but the gloss that Ron's shock troops put on Ron's tirades unfortunately does little to clean up the country and get it back on course again. Uncompromising and corrupt, his notions resemble a dilapidated shed. Kick in the door and the whole rotten structure will collapse, proving my claim that there is nothing Ron wants more than to sue people at random -- and Ron knows it. There is one final irony to my story. Most of Rep. Ron Paul's writings are thesis-less runarounds that leave the reader unclear as to both his point and his position on the issue.

Posted by Rick Wilson | December 20, 2007 9:57 AM

The rudeness and spittle-flecked tirades that Ron Paul supporters greet any who does not agree with them is the real reason not to support Ron Paul.

Posted by Mikey NTH | December 20, 2007 10:09 AM

Didn't Ron Perot run in 1992? Or was that Ross Paul?

When will we be treated to the spiffy poster-graphics illustrating the deficit, exponential entitlement spending growth, and the rest?

Ron Paul is trying to maintain the libertarian message he came to Washington with, but by hooking up with the Bush derangement crowd via his anti-war stance, he has become another Ralph Nader.

Posted by Al Fin | December 20, 2007 10:17 AM

That complaint generator is AWESOME! Thanks to Mike for recognizing it and and pointing it out.

Posted by BladeDoc | December 20, 2007 10:25 AM

Ron Paul seems to have an issue with the Fed matching the money supply to their estimates of national wealth and other non-zero sum factors in the economy. A gold standard assumes a zero-sum economy.

For folks who seem to believe in zero-sum, I usually invite them to bring a diamond and a ball-peen hammer to the next discussion, where I will demonstrate "non-zero sum events."

Posted by Kevin Murphy | December 20, 2007 10:30 AM

Ron Paul accepts the support of conspiratroid cranks like the 9/11 Twoofers, and others I won't cite for fear of running afoul of Godwin's Law.

I have gone from agreement with many of his positions to a profound personal distaste for this man, so indulgent of his evil minions.

Of course, the minions are both evil and stupid -- as their wordy spams here, and their rebarbative email spam campaign, demonstrate. Every lunatic who joins Paul drives another thousand citizens away from him.

Posted by Kevin R.C. O'Brien | December 20, 2007 10:34 AM

In the time it took Mick Russom to write that, I could make thousands of dollars.

Posted by Chester White | December 20, 2007 10:48 AM

I am writing to express my dismay and concern over Dr. Ron Paul's hateful, treacherous ramblings. Let's get down to brass tacks: We can never return to the past. And if we are ever to move forward to the future, we indeed have to present another paradigm in opposition to Paul's illiberal solutions. This letter is written with the hope that readers will think for a minute about the situation at hand. It is also worthy of note that I want to see all of us working together to transform our culture of war and violence into a culture of peace and nonviolence. Yes, this is an idealistic approach to actualizing our restorative goals. Nevertheless, you should realize that we could opt to sit back and let Paul spam the Internet with oppressive e-mail. Most people, however, would argue that the cost in people's lives and self-esteem is an extremely high price to pay for such inaction on our part. One final point: The passage of time will make it clear to even the more slow among us that the hostility and boredom Dr. Ron Paul is experiencing internally is quite evident externally.

Posted by Eliza | December 20, 2007 10:56 AM

Megan: this place has been infested with Gold Bugs. Call the exterminators, Stat!

Posted by Fat Man | December 20, 2007 11:05 AM

But I imagine part of the reason why it's catching on now is similar to the way people with persistent addiction problems grab at strange, irrelevant, and somewhat magical solutions, rather than grappling with their addictions head-on.

Yeah, everything old is new again. One of the ways to make a splash in the politics of the Roman Republic was to promise a general cancellation of debts. (Agrarian reform was another.) It ususally got you killed, but politics back then was a little rougher than today. Imagine what it would be like if the Young Democrat and Young Republican were made up of the Crips and the Bloods.

Posted by ech | December 20, 2007 11:24 AM

Ron Paul accepts the support of conspiratroid cranks like the 9/11 Twoofers, and others I won't cite for fear of running afoul of Godwin's Law.

The next time someone around here mentions their distaste for preferential employment practices, not upping the minimum wage, etc... I'll remember that the support of certain cretins for the same goals amount to an arguement against their position.

Posted by semm | December 20, 2007 11:28 AM

"I have gone from agreement with many of his positions to a profound personal distaste for this man, so indulgent of his evil minions."

Check out Paul on Glen Beck recently. He not only disavows the fringe elements who support libertariansm, he explicitly condemns both violent political movements of any kind, and any conspiracy theorists who believe that 911 was caused by intentional acts of our government (he does note that it was facilitated in part by government incompetence).

http://www.youtube.com/profile?user=ScaningTheWaves

The idea that Paul is "indulgent" of conspiracy theorists and other such riff-raff is like saying Hillary Clinton supports drug use because she'll probably get the hippie vote, or that Huckabee supports bombing abortion clinics because he'll probably get the pro-life vote.

In other words, its an excuse to avoid addressing the politicians actual positions head-on.

Posted by Phil | December 20, 2007 11:36 AM

No, a commodity-based currency is not a valid mechanism, any more than a rain-based currency or a Reality-TV based currency. The Fed bases the currency supply on the actual value of America. Going to a commodity-based currency puts the monetary supply in the hands of miners instead (or whoever is producing the commodity of choice).

And for all the people who think that the gold system is heaven for savers, you are free to buy all the gold certificates and gold coins you want right now. If you invested everything in gold in 1980, then you would be a pauper now. If you invested in 1990, you would have had almost no growth. It is only when you are looking at short (2-7 year) cycles that gold looks good.

Posted by Phelps | December 20, 2007 11:39 AM

As much as I enjoy writing letter after letter about Mr. Ron Paul, the fact remains that I am flat-out tired of Ron's psychological bullying. Before I start, however, I should state that to understand what Ron's particularly inimical form of revanchism has encompassed as a movement and as a system of rule, we have to look at its historical context and development as a form of cuckoo politics that first arose in early twentieth-century Europe in response to rapid social upheaval, the devastation of World War I, and the Bolshevik Revolution. I'm willing to accept that none of what he says carries any weight. I'm even willing to accept that a vivid realization of the caducity of life is what motivates me to encourage the ethos of exchange value over use value. But if I seem a bit chauvinistic, it's only because I'm trying to communicate with him on his own level.

By the bye, the scores of goose-stepping lie-virtuosi who comprise Ron's lynch mob must all be held accountable for helping Ron replace law and order with anarchy and despotism. Whatever weight we accord to that fact, we may be confident that I want you to know that it is apparent where his loyalties lie. Knowing, as they say, is half the battle. What remains is to unmask Ron's true face and intentions in regard to fanaticism. There is one crucial fact that we must not overlook if we are to perceive our current situation as it is, rather than in the anamorphosis of some "ideology" such as Bonapartism or animalism. Specifically, Ron insists that all it takes to start a rabbit farm is a magician's magic hat. In the long run, however, he's only fooling himself. Ron would be better off if he just admitted to himself that it's unfortunate that he has no real education. It's impossible to debate important topics with someone who is so mentally handicapped.

I, hardheaded cynic that I am, can repeat with undiminished conviction something I said eons ago: Even if one is opposed to apolaustic, unstable phallocentrism (and I, hardheaded cynic that I am, am), then surely, Ron drops the names of famous people whenever possible. That makes him sound smarter than he really is and obscures the fact that Ron's faculty for deception is so far above anyone else's, it really must be considered different in kind as well as in degree. The whole premise of Ron's plaints is false, and his arguments are specious at best. We must lend a helping hand. If we fail in this, we are not failing someone else; we are not disrupting some interest separate from ourselves. Rather, it is we who suffer when we neglect to observe that Ron's catch-phrases are devoid of any intellectual substance. For proof of this fact I must point out that the hour is late indeed. Fortunately, it's not yet too late to oppose evil wherever it rears its spleeny head. Now that you've heard what I've had to say, I want you to think about it. And I want you to join me and grant people the freedom to pursue any endeavor they deem fitting to their skills, talent, and interest.

Posted by Rick Eilensburg | December 20, 2007 11:43 AM

There was a very long period of time when this nation had zero debt, and did not tax personal incomes in order to pay interest on one. You may not have noticed because debt and the taxes that fund it are all you've ever known.

Fuck the FED, and fuck you reptiles that try and protect one of the most corrupt institutes the world has ever seen. YEP FUCK YOU megan.

Posted by Dave | December 20, 2007 11:46 AM

At least four posts in this thread are self-evidently the output of that software, I forget what it is called, that generates nonsensical hate mail by stringing together random selections from phrase lists. Are people seriously taking them for genuine comments by Ron Paul supporters, or an I the idiot for not playing along with the irony?

Posted by roac | December 20, 2007 11:54 AM

After this exchange with Ben Bernanke apparently traders on Wall Street agreed with Ron Paul:

http://www.youtube.com/watch?v=WvirM1goFq4

Posted by AnonCoward | December 20, 2007 12:01 PM

Politically speaking, Bernanke is in a pickle. He's given a dual mandate: full employment and low inflation. Even if he agrees with Paul, saying so will earn him the ire of the Democrats and some Republicans in Congress, guaranteeing he is not reappointed. If Paul wants to change the Fed, one thing he can do is introduce a bill removing the full employment mandate on the Fed, and setting the inflation target for them to hit.

Posted by 8 | December 20, 2007 12:24 PM

Wow, the Ronulans are getting vicious.

Those advocating a return to the gold standard are economically illiterate(profoundly so)-- and apparently proud of it.

Posted by capital L | December 20, 2007 12:32 PM

The dollar that passes into, say, Saudi hands now buys less when spent in, say, France. So the Saudi's want more of them.

So? The price is set in a world market that includes traders from all nations. The Saudis can't just jack up the price because they feel like it, they need to continue to sell to us, to the Chinese, to Europe, etc. They bear the exchange rate risk, not us.

Posted by Rob Lyman | December 20, 2007 12:40 PM

In 1960, I was in college, gas cost 20 cents per gallon, and gold was $36/ounce. Now gold is $800 per ounce, and that same gas would cost $4.44 in gold dollars. It is actually cheaper now, in gold dollars than it was in 1960.

Go ahead, try to tell me to disregard the constitutional requirement that no state shall "make any Thing but gold and silver Coin a Tender in Payment of Debt."

Posted by docduke | December 20, 2007 1:10 PM

Has any *state* made anything but gold or silver valid for debt repayment? That is to say, which of the 50 states is printing paper money?

Posted by Rob Lyman | December 20, 2007 1:17 PM

"Those advocating a return to the gold standard are economically illiterate(profoundly so)-- and apparently proud of it."

I will never vote for Ron Paul -- but this sort of quote is the danger of his candidacy. The need to reject the anti-war candidate is causing normally sane people to reject all of the ideas Paul advocates, even the good ones...

Funny thing is, it works the other way too. I've seen normally sane people who now support Ron Paul who are taking all of it in wholesale -- no ability to discriminate between his good ideas and his bad ones.

Why does this happen?

Posted by MPH | December 20, 2007 1:52 PM

"Politically speaking, Bernanke is in a pickle. He's given a dual mandate: full employment and low inflation."

This is more bad economics. The Phillips curve was rejected in the 70s and well before that by the better economists - namely the Austrian School (von Mises).

There is no such thing as a trade off between inflation and full employment. Remember stagflation?

Read: The Theory of Money and Credit by Ludwig von Mises http://www.econlib.org/library/mises/msTContents.html

Posted by MPH | December 20, 2007 1:56 PM

The money printed should be linked to the growth of economy. Not more not less.
Ron Paul and the FED are both wrong, i suspect FED knows it is wrong but because political pressure they just do it. They probably dont ring the bell because have time to correct since the debt was much higher just after WW2 and the doom didnt happened. Ron Paul appears sometimes outside economic rules, his opinion of Gold Standart is an example of that. Gold for a brief time might have been usefull to represent the output of a country but today doesnt represent anything except a cultural link of value every year more relative. I bet a Cement Rule or a basket of produced goods would be a much realist way to know how much money to print.

Posted by lucklucky | December 20, 2007 2:11 PM

This letter may seem a bit long but Dr. Ron Paul's wild dissertations cannot be adequately described in less than a long essay. Let's get down to business: I indubitably cannot believe that Dr. Paul would consider oleaginous, benighted usurers as the worst classes of meddlesome buttinskies there are. The sooner he comes to grips with that reality, the better for all of us. It's precisely because the popularity of his machinations among infantile, disingenuous propagandists is a harbinger of brutal things to come that I myself am shocked and angered by his birdbrained, egocentric improprieties. Such shameful conduct should never be repeated.

I oppose Dr. Paul's slurs because they are noisome. I oppose them because they are wretched. And I oppose them because they will destroy everything beautiful and good eventually.

If I said that space gods arriving in flying saucers will save humanity from self-destruction, I'd be a liar. But I'd be being thoroughly honest if I said that if you were to try to tell his cultists that his belief systems reek like rotten eggs, they'd close their eyes and put their hands over their ears. They are, as the psychologists say, in denial. They don't want to hear that the impact of Dr. Paul's bad-tempered, cankered morals is exactly that predicted by the Book of Revelation. Evil will preside over the land. Injustice will triumph over justice, chaos over order, futility over purpose, superstition over reason, and lies over truth. Only when humanity experiences this Hell on Earth will it fully appreciate that Dr. Paul's statements such as "Embracing a system of neopaganism will make everything right with the world" indicate that we're not all looking at the same set of facts. Fortunately, these facts are easily verifiable with a trip to the library by any open and honest individual. One final point: The longer we delay action, the harder it will be to tell you things that Dr. Ron Paul doesn't want you to know.

Posted by OutragedByPaul | December 20, 2007 2:32 PM

Mr. Russom shows an astonishing talent for how many syllables he can pack into how few ideas.

Posted by shotgunfreude | December 20, 2007 2:35 PM

Let me begin this letter with a few simple statements of fact. First fact: Scott Pakin's automatic complaint-letter generator is crazier than a road lizard. Second fact: Scott Pakin's automatic complaint-letter generator's head is so far in rectal defilade it would require major surgery to extricate it. Third fact: When lying and evidence-tampering fail, Scott Pakin's automatic complaint-letter generator usually turns to outright intimidation to misdirect our efforts into fighting each other rather than into understanding the nature and endurance of sinful ruffianism. These three facts bear repeating over and over again. They are simple and self-evident but it is easy to forget them in the blizzard of lies and obfuscation coming from Scott Pakin's automatic complaint-letter generator and its helpers these days. Let me get to the crux of the matter: It's decidedly a tragedy that Scott Pakin's automatic complaint-letter generator's goal in life is apparently to coordinate a revolution. Here, I use the word "tragedy" as the philosopher Whitehead used it. Whitehead stated that "the essence of dramatic tragedy is not unhappiness. It resides in the solemnity of the remorseless working of things," which I interpret as saying that mudslinging is Scott Pakin's automatic complaint-letter generator's forte. Get that straight, please. Any other thinking is blame-shoving or responsibility-dodging. Furthermore, there is no such thing as evil in the abstract. It exists only in the evil deeds of evil organizations like Scott Pakin's automatic complaint-letter generator.

Scott Pakin's automatic complaint-letter generator can't attack my ideas, so it attacks me. It could be worse, I suppose. It could reinforce the impression that slimy lunkheads -- as opposed to Scott Pakin's automatic complaint-letter generator's acolytes -- are striving to cause an increase in disease, gnosticism, crime, and vice. The charlatanism "debate" is not a debate. It is a harangue, a politically motivated, brilliantly publicized, soporific attack on progressive ideas. One argument Scott Pakin's automatic complaint-letter generator makes is that it is as innocent as a newborn lamb. That's just sheer arrant nonsense. The truth is that everybody is probably familiar with the cliche that its subliminal psywar campaigns represent a new evil ethos that lackluster, unprincipled foul-types will eventually use to inure us to distasteful classism. Well, there's a lot of truth in that cliche.

I've known some drongos who were impressively prudish. However, Scott Pakin's automatic complaint-letter generator is passive-aggressive and that trumps prudish every time. Scott Pakin's automatic complaint-letter generator maintains that mediocrity and normalcy are ideal virtues. This is hardly the case. Rather, there is growing evidence that says, to the contrary, that it contends that it is its moral imperative to condone universal oppression and that, therefore, closed-minded yobbos are easily housebroken. This bizarre pattern of thinking leads to strange conclusions. For example, it convinces tyrannical primates (as distinct from the neurotic blowhards who prefer to chirrup while hopping from cloud to cloud in Nephelococcygia) that the future of the entire world rests in Scott Pakin's automatic complaint-letter generator's hands. In reality, contrariwise, when I hear Scott Pakin's automatic complaint-letter generator say that obscurity, evasiveness, incomprehensibility, indirectness, and ambiguity are marks of depth and brilliance, I have to wonder about it. Is it utterly sadistic? Is it simply being bloodthirsty? Or is it merely embracing a delusion in which it must believe in order to continue believing in itself? It is bootless to speculate on the matter but it should be noted that elitism is dangerous. Scott Pakin's automatic complaint-letter generator's uncompanionable version of it is doubly so. Everything I've written in this letter amounts to this: People should just treat each other with decency and respect.

Posted by Njorl | December 20, 2007 2:52 PM

Even Jim Cramer of MSNBC's Mad Money agreed with Ron paul on the Fed.

The Fed isnt collapsing the dollar?

The American consumer isnt hurting?

Pigs Fly?

What are you smoking?

Posted by Kevin | December 20, 2007 3:01 PM

When I was in Japan, the affect on my American Bank account was very dramatic. A flux of 10 cents multiplied on every dollar 14000 times is pretty noticeable. Every day our economy becomes more and more globalized. If we just cut out farm subsidies we could balance the price of food no matter what standard we are on so that is really irrelevant. What IS relevant is the fact that as we rely more on investments in the stock market the more important it becomes for us to have a strong dollar and healthy economics around the world. Its all connected somehow.

Posted by Patriot Dude | December 20, 2007 6:36 PM

For Rob Lyman, from Article I of the U.S. Constitution: "Section 10. No State shall .. coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; ..."

I am no constitutional scholar, but the meaning seems clear enough to me. The plain text says that nothing is to be used (in Payment of Debts) except gold or silver. The bankers didn't like it then, and don't like it now. Unfortunately, between then and now, the voters went into a prolonged sleep.

Posted by docduke | December 20, 2007 7:16 PM

"...the dollar is not declining because of Fed policy..."

??? !!! ???

After picking my jaw up off the floor I have two questions:

1. What planet do you live on?
2. How can anyone making such an idiotic statement be in a position to discern just who is "a really, really smart economist"?

Posted by josh m | December 20, 2007 7:22 PM

docduke, it says "no State shall..." That limits the power of the several states, not the Federal government.

No state has issued its own coins or paper money. I suppose you could argue that the several states are forbidden to accept FRNs in payment of state taxes, but that's not really "making" them a payment for debts, its accepting them. Maybe state courts are forbidden to order the payment of judgments in FRNs. I'm not sure.

But it certainly doesn't mean that "nothing is to be used (in Payment of Debts) except gold or silver."

Posted by Rob Lyman | December 20, 2007 7:54 PM

The well-honed language of the educated, cultured elite in this blog almost lulls one into a sense of affirmation - that yes, there is an isle of sanity and balanced consideration of these important issues. One can nearly believe that these voices, so attuned to the nuances of economies, surely must speak the truth. And when they pin Ron Paul down and shake loose his innumerable overstatements and half-thought-out assertions, we come quite close to agreeing that yes, Dr. Paul is a ridiculous character after all. The idea of such a man being Presidential seems utterly horrifying. Ah, so many Buckley impersonators trying out their pens online! It is a feast for the ears and eyes! And Dr. Paul is such an easy man to trample underfoot. He is so, how shall I say? Uncouth.
Well, there are those of us who must work each day to earn our daily bread. We have no airs of cultivation or luxury. We do not speak in fake aristocratic musical monologues to torpedo the "unwashed" such as Ron Paul. We listen and give him a fair shake like anyone else. We have no trust fund. We have only our labor. We see our nation $9 trillion in debt. We are the ones who will have to pay this off. Argue about gold standards and the causes of inflation and recession all you want and use whatever language and tone befits your station in life. It doesn't matter. When the house of cards tumbles, your money will be just as worthless as mine.

Posted by Topher | December 20, 2007 8:03 PM

The Federal Reserve could be involved in more than we can imagine.

Have you ever wondered just where the root of the opposition may be coming from against defending our nations borders and upholding of our immigration laws?

Have you ever considered just how much money we are turning over to the Federal Reserve to print and loan us our own money?

With a national debt of 7,000,000,000,000 we are paying 280,000,000,000 in one year at a 4% interest rate.

The Federal Reserve was put together by a small group of men as a way to monopolize the banking industry in this country. They had trouble selling the ideal at first, but it is said that with a few bribes in the right places, they accomplished their goal. In 1914 the Federal Reserve opened for business.

They operate the way our personal credit cards do. When we borrow money from our credit card companies, we pay interest. Then our country needs to borrow money, we owe the Federal Reserve interest.

The group of men that formed the cartel that would later become the Federal Reserve were already very wealthy. They were into banking and business in many countries of the world. The Federal Reserve became, not just another pearl, but a very special pearl on a string of pearls they possessed.

Think of the power they now control.

This year we turned over to them 280,000,000,000, just for the interest on what we’ve borrowed. If what I suspect is true, they don’t even spend their own money to buy what they desire. It looks to me like what they have been doing since the bribe of Woodrow Wilson, and the Congress around 1912, is to continue bribing to get what they want. If they can buy off a politician to spend on a program that serves their future goals, then think of just what that means. Instead of them coming right out and spending their own money, they can have us spend ours, to serve THEIR goals. That means we borrow money from them to pay for it, and they rake in interest on the money that we spent to serve THEM.

I would think that this group of men has had a chance to open up whole new avenues of ways to turn a profit in the last hundred years or so. I would also think the interest on our debt is only a small part of what they take in, in the United States.

Many odd things have been happening in the United States that are hard to understand. Many odd things around the world have also been occurring.

Keep your minds and your eyes open and think about what they may be up to… and for whom.

"I am a most unhappy man. I have unwittingly ruined my country.
A great industrial nation is controlled by its system of credit.
Our system of credit is concentrated. The growth of the nation,
therefore, and all our activities are in the hands of a few men.
We have come to be one of the worst ruled, one of the most completely
controlled and dominated governments in the civilized world.
No longer a government by free opinion, no longer a government by
conviction and the vote of the majority, but a government by
the opinion and duress of a small group of dominant men."

-Woodrow Wilson

Posted by Carson | December 20, 2007 9:50 PM

We have ran up the price of housing just like we did the stock market in the twenties, we were willing to out borrow the next guy.

It works good it the price keeps going up. Not so good when you run out of suckers.

Posted by Carson | December 20, 2007 9:54 PM

Well, there are those of us who must work each day to earn our daily bread. We have no airs of cultivation or luxury. We do not speak in fake aristocratic musical monologues - Topher

Yes, you do.

Posted by brooksfoe | December 21, 2007 3:10 AM

The gold standard is probably a bad idea - But it's not as lame as Amity Shlaes idea a few years ago to consider Housing as the new reserve currency - Before the bubble burst - she was basically calling for a Housing Standard.

Anyway - people who oppose Ron Paul oppose him because they support the war policy of Bush, in one way or the other. But there is a felt need to offer more fashionable arguments, no matter how irrelevent.

There is a kernal of Bush's base vote that boils with bigotry. Yet - the media rarely points that out, because Bush is not considered a bigot. However, a couple of freaks show up on a Paul fundraising list and all of a sudden people pretend to care.

But they don't really care = because they know Paul will never be President. Rather - they want to discredit him because they support the war policy, overtly or covertly. That's what Paul's campaign is all about.

Posted by Comment | December 21, 2007 8:20 AM

LOL! My oh my! You actually believe the garbage numbers that the government is feeding you!! If you just take a look at http://www.shadowstats.com/cgi-bin/sgs/data it is plain to see that money supply growth (M3) is approaching 16% a year and real inflation has almost reached 12%. The government stopped publishing M3 growth for a reason: It clearly shows that they are devaluing the dollar. It is true that they don't want to publicize this fact and are counting on shills like yourself to hide the truth from the American people. We are the ones suffering the consequences of this reckless policy and the value of the dollar has collapsed as a result of this policy.

Posted by j bowen | December 21, 2007 11:27 AM

Carson,

The quote is fabricated. You won't find it anywhere but on kooky black helicopter websites.

It's a combination of several statements made by Wilson from before the Fed was created -- before Wilson was even president.

Posted by David Nieporent | December 22, 2007 5:28 AM

Ron Paul schooled Ben Bernanke like a professor schools a fresher, and the Ron Paul supporters are schooling Megan McArdle in these comments!

Posted by Libertarian Girl | December 22, 2007 3:48 PM