The world is in permanent monetary crisis, but once in a while, the crisis flares up acutely, and we noisily shift gears from one flawed monetary system to another. We go back and forth from fixed paper rates to fluctuating rates, to some inchoate and aborted blend of the two. Each new system, each basic change, is hailed extravagantly by economists, bankers, the financial press, politicians, and central banks, as the final and permanent solution to our persistent monetary woes.

Ever since the Western world abandoned the gold coin standard in 1914, the international monetary system has been rocketing from one bad system to another, from the frying pan to the fire and back again, fleeing the problems of one alternative only to find itself deeply unhappy in the other.

An all-too-familiar melodrama was played out in full on the stage of the world media. It was the same phony story, with the same Heroes and Villains.

The French franc, a supposed noble currency, was “under attack.” Previously in September, it was the British pound, and before that the Swedish krona. The “attack” is as fierce and mysterious as a shark attack in the coastal waters. The Hero is the Prime Minister or Finance Minister of the country, who tries desperately to “defend the value” of the currency.

Hold on to your hats: the world has now embarked on yet another “new economic order”—which means another disaster in the making. Ever since the abandonment of the “classical” gold-coin standard in World War I (by the United States in 1933), world authorities have been searching for a way to replace the peaceful world rule of gold by the coordinated, coercive rule of the world’s governments.

Governments, especially including the U.S. government, seem to be congenitally incapable of keeping their mitts off any part of the economy. Government, aided and abetted by its host of apologists among intellectuals and policy wonks, likes to regard itself as a deus ex machina (a “god out of the machine”) that surveys its subjects with Olympian benevolence and omniscience, and then repeatedly descends to earth to fix up the numerous “market failures” that mere people, in their ignorance, persist in committing.

For a half-century, the Keynesians have harbored a Dream. They have long dreamed of a world without gold, a world rid of any restrictions upon their desire to spend and spend, inflate and inflate, elect and elect. They have achieved a world where governments and Central Banks are free to inflate without suffering the limits and restrictions of the gold standard. But they still chafe at the fact that, although national governments are free to inflate and print money, they yet find themselves limited by depreciation of their currency.

The Reagan administration seemed to have achieved the culmination of its “economic miracle” of the last several years: while the money supply had skyrocketed upward in double digits, the consumer price index remained virtually flat. Money cheap and abundant, stock and bond markets boomed, and yet prices remaining stable: what could be better than that? Had the President, by inducing Americans to feel good and stand tall, really managed to repeal economic law?

There has been a veritable revolution in the attitude of the nation’s economists, as well as the public, toward our banking system. Ever since 1933, it was a stern dogma—a virtual article of faith—among economic textbook authors, financial writers, and all Establishment economists from Keynesians to Friedmanites, that our commercial banking system was super-safe. Because of the wise Establishment of the Federal Deposit Insurance Corporation in 1933, that dread scourge—the bank run—was a thing of the reactionary past.

It was a scene familiar to any nostalgia buff: all-night lines waiting for the banks (first in Ohio, then in Maryland) to open; pompous but mendacious assurances by the bankers that all is well and that the people should go home; a stubborn insistence by depositors to get their money out; and the consequent closing of the banks by government, while at the same time the banks were permitted to stay in existence and collect the debts due them by their borrowers.

Q. When is a tax not a tax?

A. When it’s a “fee.” It was only a question of time before we would discover what form of creative semantics President Bush would use to wiggle out of his “read my lips” pledge (bolstered by the Richard Darman “walks like a duck” corollary) never ever to raise taxes. Unfortunately, it took only a couple of weeks to discover the answer. No, it wasn’t “revenue enhancement” or “equity” or “closing of loopholes” this time; it was the good old chestnut, the “fee.”