Entries Tagged as 'monetary policy'

Don’t Endorse Ron Paul

David Frum December 15th, 2011 at 11:08 am 148 Comments

Andrew Sullivan declares himself for Ron Paul as the GOP presidential nominee, as he did in 2008 as well.

As Andrew himself jokes, the Sullivan endorsement is more likely to hurt Paul than help him. In any event, there is precisely zero likelihood of Paul winning the GOP nomination, although he may well help to stop Gingrich from winning it. Paul is inescapably a boutique candidate, appealing to a very particular fringe within the GOP.

But here’s what does need discussing, in the wake of Andrew’s endorsement of Paul.

Paul has had an outsize appeal to writers and intellectuals dissatisfied with the present state of Republicanism.

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Premature Euro-Skeptics

David Frum November 18th, 2011 at 12:07 am 14 Comments

The New York Times’ profile of Euro-skeptic Bernard Connolly–who warned early of the danger of creating a single currency for a polyglot continent–is one more reminder of the enduring force of the old common-law rule: truth is not only no defense; truth actually compounds libel.

People who know him say that his public reticence is also fed by a lingering anxiety that officials will exact some form of revenge.

The origins of that fear as well as the anger and passion that drive him date to 1995, when he took a leave from his job to write “The Rotten Heart of Europe,” an excoriating history of the failure of the euro’s predecessor, the European Exchange Rate Mechanism.

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Inflation? Where?

David Frum November 2nd, 2011 at 2:27 pm 96 Comments

John Makin cogently explains in his monthly economic newsletter that Federal Reserve policy has not been too loose and that inflation is not a near-term threat.

The latest core inflation data through September show the three-month annualized pace decelerating from more than 3 percent during the second quarter to 2.1 percent during the third quarter. The monthly annualized core inflation rate has dropped even more sharply.

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`In Time’ is a Parable Against Tight Money

October 31st, 2011 at 4:10 pm 7 Comments

I can’t recommend the new Justin Timberlake and Amanda Seyfried sci-fi action thriller In Time on the basis of its acting or plot (both are mediocre) but I can recommend the film as a parable about bad monetary policy.

Here is the premise of the film: in the future, humans are genetically modified to stop aging when they turn 25. They are capable of living forever but the catch is that they only keep living in perpetual youth if they have enough “time” on them. Every person walks around with a bioluminescent clock on their arm showing the amount of time they have, counting down.

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Who Gains With a Golden Currency?

October 7th, 2011 at 12:28 am 47 Comments

The Heritage Foundations’ ‘Sound Money’ conference gathered many individuals convinced that something needs to be done to change the monetary system. The strategy advocated by some members of a panel (entitled, “Congressional Changes”) was to offer gold as a ‘competitive’ currency option at the state and national level.

Gold standard advocates have had some success with state-level laws but they are also interested in laws at the national level which will give preferences and advantages to individuals who either already own gold or individuals who plan to make gold investments. Even if a gold standard is not adopted, some gold owners and investors may still benefit from the proposed changes. (Though the question should be asked: at whose expense?)

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Meet the Sincere Gold Bugs

October 6th, 2011 at 1:25 am 42 Comments

The Heritage Foundation is currently hosting a conference it bills as a “Conference on a Stable Dollar.” The words “Gold Standard” do not appear in the title of the event but that is what the conference is about.

Near the end of the first panel (entitled: What is a Stable Dollar?), Stuart Varney, a Fox News host and moderator of the panel, asked the audience to raise their hands if they thought that gold should be part of some sort of monetary reform. Nearly the entire audience of wonks, academics, college students, and hedge fund managers raised their hands. How did the conservative movement reach this point?

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What Romney Gets Right

David Frum October 5th, 2011 at 8:50 am 138 Comments

David Brooks yesterday took up the case for Mitt Romney in his New York Times column. Ramesh Ponnuru today (mostly) seconds it at NRO.

Ponnuru adds a series of questions of which one in particular carries a lot of force.

The [Republican] party has reached a consensus on most issues.

3) Is that consensus correct? If not can Romney supply what it lacks?

On the most urgent economic issue of the day – recovery from the Great Recession – the Republican consensus is seriously wrong.

It is wrong in its call for monetary tightening.

It is wrong to demand immediate debt reduction rather than wait until after the economy recovers.

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Beck Didn’t Warn Me Gold Can Fall!

September 27th, 2011 at 12:13 am 76 Comments

The gold market meltdown — with prices plunging in recent weeks from over $1, healing 900 an ounce to under $1, seek 600 — is a reminder that the precious metal is a volatile, speculative commodity. It also signals a bear market in credibility for the many right-leaning cable-news and talk-radio hosts who have touted gold relentlessly in recent years as a hedge against economic calamity.

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Still Sound as a Dollar

September 23rd, 2011 at 2:32 pm 22 Comments

Conservatives nowadays routinely worry about the dollar’s strength and stability. The dollar, tadalafil however, illness refuses to cooperate. Instead, malady it lately has been rising in foreign-exchange markets, as it typically does in times of international economic and financial stress.

The dollar serves as a safe haven. Investors tend to transfer funds into dollar-denominated assets, such as U.S. Treasuries, at moments when financial markets around the world are being buffeted. This occurs even if the U.S. economy is not in good shape. As long as the dollar and dollar-denominated assets are seen as relatively safe, the dollar will tend to strengthen in times of trouble.

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Heritage Joins the Hard Money Bandwagon

September 22nd, 2011 at 3:16 pm 12 Comments

In my interview with economist John Makin, he said that the congressional GOP sent its anti-stimulus letter to the Federal Reserve not because they thought the letter would change the decision, but so they could mark down their opposition to Bernanke’s policies.

Is this opposition cynical or sincere? Do Republicans want the economy to be weaker to see Obama lose reelection in 2012 or do they genuinely believe their new ideas on monetary policy? The fact that the influential Heritage Foundation has decided to hold a conference on monetary policy suggests that many in the conservative movement are convinced that they should support a policy of tighter money.

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