The Dollar Crisis

No matter how many warnings have been issued, an economic crisis always takes a country by surprise. The most urgent task is to somehow prevent policymakers from doing evil things to “correct” the crisis. Every form of intervention can only make matters worse. The best policy is to adopt a laissez-faire policy through regulatory cuts, sound money, and eliminating legal restrictions on trade. The liquidation must be allowed to happen on its own to provide a suitable foundation for a future recovery.

The Manichean President

Greenwald’s argument is a simple one: Because of the overwhelming military might of the United States, no other country can attack us without facing utter destruction. Other countries, wishing rationally to advance their own interests, grasp this fact.

Accordingly, they will neither attack us nor threaten us. A rational American foreign policy then to a large extent presents no difficulty. Military measures directed against other countries are unnecessary. Given the manifest costs of these measures, we should not undertake them.

We dearly need a dollar crisis

One of the claims made against the gold standard is that there has been more stability since we adopted a paper standard than when we were under gold. The unmentioned: the problems have been papered over at the expense of our savings and the dollar’s purchasing power. There has been a trade-off at work here. The more recessions are papered over, the less our money is worth. It’s true that the data reveal crises under a gold standard, but their frequency shows the opposite of what it seems.

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