Key Monetary Writings

Where the Gold Standard Act of 1984 Came From--and Why It's Still Relevant

I’d like briefly to outline the debate that occurred among advisers to Jack Kemp (1935-2009) in the early 1980s and led to Jack's introduction of the Gold Standard Act of 1984--then explain why the agreement on gold that eluded Ronald Reagan's advisers is now possible. The essence of the “supply-side” approach to economic policy was that monetary and fiscal policy are inherently separable. The previous consensus going back to John Maynard Keynes was that monetary and fiscal policy always work in the same direction. The idea that you can have a different “policy mix” is generally credited to …Read more

The Federal Reserve and the Dollar

To evaluate the history of the Federal Reserve System, we cannot help but wonder, whither the Fed? and to consider wherefore its reform—even what and how to do it. But first let us remember whence we came one century ago. The End of the Classical Gold Standard No one knew better than Jacques Rueff, a soldier of France and a famous central banker, that World War I had brought to an end the preeminence of the classical European states system and its monetary regime—the classical gold standard. World War I had decimated the flower of European youth; it had destroyed the European continent’s …Read more

Measuring Misery Around the World

The Great Recession grinds on. And as it does, politicians of all stripes ask, usually behind closed doors, “Just how miserable are our citizens?” The chattering classes offer a variety of opinions. As it turns out, there is a straightforward way to measure what is termed the misery index. The late Arthur Okun, a distinguished economist who served as chairman of the President’s Council of Economic Advisers during President Johnson’s administration, developed the original misery index for the United States. Okun’s index is equal to the sum of the inflation and unemployment rates. … Read more

The Major Problems Congress Created by Ending the Classical Gold Standard

The Major Problems Congress Created by Ending the Classical Gold Standard I’m grateful for the invitation to take part at the 2014 annual Association for Private Enterprise Economics (APEE) conference in this panel asking “Is There a Case for a U.S. Return to the Gold Standard?”--especially in company with such distinguished fellow panelists as our chair John Tatom, Larry White, and Adrian Oswaldo Ravier. Our panel's question can be answered in a word: Yes. I’d like to draw on a chapter in my book, Redeeming Economics (Mueller 2010), to explain why only proper monetary reform—specifically, restoring the international gold standard without official-reserve …Read more

The Great Destabilizer

Dr. Karl Schiller, West Germany’s Economics Minister between 1966 and 1972, pithily pronounced that: “Stability is not everything, but without stability, everything is nothing.” I agree. In the economic sphere, instability is usually a “bad”, not a “good”. The world’s great destabilizer is the United States. How could this be? In the post-World War II era, the world has been on a U.S. dollar standard. Accordingly, the U.S. Federal Reserve is the de facto central banker for the world. … Read more

A History of the Federal Reserve

1907 Before the Fed was… J.P. Morgan In 1907, as one New York bank after another fell victim to a run, the financial community, without any central bank to look to, turned to J. Pierpont Morgan, the preeminent financier of his generation. He had lived through more panics than had any other banker, in 1895 actually bailing out the United States government itself when it was within days of running out of gold and defaulting on debts to Europe. Though J.P. Morgan & Co. was by no means the country’s biggest bank, Pierpont Morgan himself had acquired an extraordinary aura of authority that …Read more

Europe’s Bank Money Blues

Well, it’s official, the economic talking head establishment has declared war on Germany. The opening shots in this battle were fired by none other than the United States Treasury Department, which had the audacity to blame Germany for a weak Eurozone recovery in its semi-annual foreign exchange report. The Treasury’s criticisms were echoed by IMF First Deputy Managing Director David Lipton, in a recent speech in Berlin — a speech so incendiary that the IMF opted to post the “original draft,” rather than his actual comments, on its website. Things were kicked into a full blitzkrieg when Paul …Read more

Yellen, the Hawk?

Well, it’s official. President Obama has picked Janet Yellen as his nominee to be the next Federal Reserve Chairman. In the months leading up to this announcement, the press unanimously dubbed Yellen the Queen of the Doves, pointing to her reluctance to roll back the Fed’s Quantitative Easing program. As it turns out, however, Yellen is hardly the dove she is made out to be. Indeed, when it comes to money supply, Dr. Yellen seems, well, downright hawkish. Traditionally, the dove label has referred to an emphasis on the Fed’s mandate to pursue full employment (even at the expense of slightly …Read more

The Gold-exchange Standard: An Object of Astonishment and Scandal

The Gold-exchange Standard: An Object of Astonishment and Scandal"[The gold-exchange standard] was the outcome of an unbelievable collective mistake which, when people become aware of it, will be viewed by history as an object of astonishment and scandal." -- Rueff In The Monetary Sin of the West (The Macmillan Company, 1972, 1971, pp. 23-24), Jacques Rueff addressed the "original sin" that stands behind the monetary disorders of his, and our, era. He begins, prophetically, in words written shortly before President Nixon ended, rather than mended, the disordered remnants of gold convertibility:   "The problem of Western currency is more topical than ever. …Read more

Kathleen M. Packard, Publisher
Ralph J. Benko, Editor

In Memoriam
Professor Jacques Rueff

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