‘In Money We Trust?’
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Coming soon to a public television station near you is a documentary favoring the gold standard. If that seems improbable it may be from underestimating the determination of Steve Forbes. He is the author of the book “Money,” on which the film is based. The book is about how, in the words of its subtitle, the destruction of the dollar threatens the global economy and what we can do about it.
The book was first brought out in 2014. At the time, the Sun dubbed Mr. Forbes the “anti-Piketty” — that is, the best answerer of the economist Thos. Piketty, then in vogue for his complaints about inequality. Mr. Forbes’ brilliant book nailed the point that the inequality so many were complaining about had burgeoned after our government abandoned a stable, gold-based dollar.
At the time, it looked to us as if the idea of monetary reform might prosper in Congress. And it did, at least in the House (more on which in moment). It failed in the Senate. Not for lack of trying by Mr. Forbes. The significance of the new documentary is that it may restore some lift to this issue, as the film starts to make its way around the public broadcasting stations.
We certainly hope so. The genre of the t.v. documentary forces filmmakers to get to the pith. Mr. Forbes goes right to it in the title of the film, “In Money We Trust?” He and those he interviews on camera drill in on the consequences of the loss, after we delinked the dollar from gold in the 1970s, of trust in our national currency. It touched off a crisis of trust more generalized than money.
The documentary includes an illuminating interview with the former chairman of the Federal Reserve, Paul Volcker. It strikes us as newsworthy, in that Mr. Volcker comes across as much more concerned about stable, honest money than one might guess from his public reserve in the years since he was at the Fed. He ridicules a goal of 2% inflation, worrying it could creep to 3% or 4% or more.
An astonishing array of the luminaries in the cause of honest money in the past generation are interviewed in the film. They include, to name but a few, Judy Shelton, Lawrence Reed, James Grant, George Gilder, Nathan Lewis, and Art Laffer. The film illuminates the fact that there is a full field of articulate advocates for a gold standard, come the day — or to hasten the day — when Congress is ready pick up this issue.
Which brings us back to the House. The day after we watched Mr. Forbes’ film, we watched the Speaker, Paul Ryan, deliver his farewell address. Covering him over the years, we’d come to appreciate his attention to the gold question. In 2010, shortly after the value of the dollar collapsed to less than a 1,200th of an ounce of gold, he put the gold question to Chairman Bernanke.
The leader of the world’s most powerful central bank hemmed about other commodity prices, then hawed about how he didn’t “fully” understand the movements in the gold price. He finally managed that “some people believe that holding gold will be a hedge against the fact that they view many other investments as being risky and hard to predict at this point.”
We suggested at the time that Mr. Ryan could make a presidential campaign out of such refusal to acknowledge the culpability of the Fed itself. In the event, Mr. Ryan ran for vice president with Governor Romney. Congressman Ron Paul teed up the monetary issue in the primaries. The GOP responded by putting a monetary reform plank in the platform. Mr. Romney failed to stand on it and went down to a historic defeat.
Mr. Ryan rebounded as Speaker in October 2015. Within weeks the House passed a major monetary bill, the Fed Oversight, Reform, and Modernization Act. We called it a monetary reform “trifecta,” in that it included a) a requirement that the Fed establish a monetary rule and make it known, b) Dr. Paul’s “Audit the Fed” bill to provide for full oversight by Congress, and c) a monetary commission.
Yet the FORM Act and subsequent improvements died in the Senate. President Trump stood on essentially the same monetary reform planks as the 2012 platform, but went further than Mr. Romney had gone. Yet once in the White House, even Mr. Trump dropped monetary reform. So Mr. Forbes’ film becomes an urgent reminder that this most fundamental of all issues awaits action as our economy is on knife edge and our leaders are desperate for signals they can trust.
The Editor of the Sun is interviewed in “In Money We Trust?”, as is his wife, the historian and journalist Amity Shlaes.