As the radicals rally for a return to policies designed to tax — even confiscate — the wealth of the richest Americans, The New York Sun is prepared to offer a deal. We’ll join Congresswoman Alexandria Ocasio-Cortez in her 70% tax rate or Senator Elizabeth Warren in her call for a levy on the super-rich if they’ll join The New York Sun in its call for a return to the gold standard.

We know, we know. Not going to happen. That doesn’t mean it’s not logical. What ignites our rashness is the latest column from the New York Times’ Nobel laureate, Paul Krugman. He endorses Senator Warren’s proposal to, as Mr. Krugman puts it, “impose a 2 percent annual tax on an individual household’s net worth in excess of $50 million, and an additional 1 percent on wealth in excess of $1 billion.”

Mr. Krugman reckons that would up the average tax on the top 0.01% to 57%. “Those are high numbers, although they’re roughly comparable to average tax rates in the 1950s,” Mr. Krugman writes. That’s only the latest of the columnist’s patented paeans to the Eisenhower years. Our favorite was when on Bloomberg television Congressman Ron Paul trapped him in respect of inflation.

“I’m a defender of the economic policies that we followed after World War II, that produced the best generation of economic growth that this country has ever experienced,” Mr. Krugman said. He explained, “I like the America that my parents prospered in. I think we can restore a lot of that.” He had a whole list of things he liked about the era, we noted at the time, except the gold exchange standard.

No doubt that marginal tax rates were high in the 1950s. We look forward to seeing how Mmes. Ocasio-Cortez and Warren and Mr. Krugman credit them for the growth of the era. Suffice it to say that they were ultimately deemed counterproductive — an epiphany not of the Republicans but of the Democrats, led by President Kennedy, who advanced his famous supply-side tax cuts.

It was, in our view, precisely a restoration of a gold standard that actually set the stage for the expansion of the 1950s. This was done at Bretton Woods, New Hampshire, at the end of World War II. It wasn’t a purist’s gold standard. It did, though, arrange the world’s monetary system around a promise by America to redeem in gold — at a 35th of an ounce — dollars presented by foreign governments.

What an economy that promise produced. It undergirded many of the things Mr. Krugman cherishes about the America his parents prospered in. Including, incidentally, a jobs boom. During the life of the Bretton Woods system, between, say, 1947 and 1971, our unemployment averaged something like 4.6%, according to the U.S. Bureau of Labor Statistics.

Bankruptcy rates were modest, which should interest Mrs. Warren, who specializes in bankruptcy law and wrote a book on its relation to inequality. When Bretton Woods collapsed — due, in our estimate, to government overspending and LBJ’s attempt to have, during Vietnam, both guns and butter — all these features of the economy of Mr. Krugman’s parents’ era went to hell in a handbasket.

In the age of fiat money, meaning dollars with no backing by gold, unemployment soared, as did the personal bankruptcy rate that Mrs. Warren worries about and the inequality rate of which Thos. Piketty complains (and illustrates with his famous Chart 9.8). These are the issues we’d throw into the debate courted by Mr. Krugman and the rising generation of presidential contenders.

Just to mark the point, The New York Sun doesn’t like high marginal tax rates or special wealth taxes any more than do the most particular plutocrats. Our fiscal problem may be huge. Our view, though, is that monetary crisis takes precedence. Without a way of measuring value no economy can really work. So we see repairing the monetary system as job number one. Which is the logic of higher taxes in return for honest money.

________

Image: James Gilray’s 18th Century cartoon of Wm. Pitt the Younger collecting the first graduated income tax. From Liberal Vision, via Wikipedia.