Richard Nixon thought that going off the gold standard would be good for himself politically. But his reckless action made possible, even inevitable, the explosive expansion of government spending, debt, and intervention that followed.
Governments, especially including the US. 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.
Alan Greenspan has received his foreordained reappointment as chairman of the Fed, to the smug satisfaction and contentment of the entire financial Establishment.
For them, Greenspan's still in his heaven, and all's right with the world. No one seems to wonder at the mysterious process by which each succeeding Fed chairman instantly becomes universally revered and indispensable to the soundness of the dollar, to the banking and financial system, and to the prosperity of the economy.
AIan Greenspan has received his foreordained reappointment as chairman of the Fed, to the smug satisfaction and contentment of the entire financial Establishment. For them, Greenspan's still in his heaven, and all's right with the world. No one seems to wonder at the mysterious process by which each succeeding Fed chairman instantly becomes universally revered and indispensable to the soundness of the dollar, to the banking and financial system, and to the prosperity of the economy.
Few occurrences have been more dreaded and reviled in the 'history of economic thought than deflation. Even as perceptive a hardmoney theorist as Ricardo was unduly leery of deflation, and a positive phobia about falling prices has been central to both Keynesian and monetarist thought.
