tag:blogger.com,1999:blog-7893272060787897238.post8610647812466835948..comments2024-03-19T08:42:45.690-04:00Comments on The Delaware Libertarian: Two kick-butt economic posts that point out all the things Paul Krugman, Mark Zandi, and Timothy Geithner aren't talking aboutSteven H. Newtonhttp://www.blogger.com/profile/09097470960863103473noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-7893272060787897238.post-1848463646061447922009-02-23T20:01:00.000-05:002009-02-23T20:01:00.000-05:00Moreover, the Gold Standard of the 1930s, which we...<I>Moreover, the Gold Standard of the 1930s, which we long ago abandoned, acted like a kind of straightjacket on monetary policies.</I><BR/><BR/>This statement sort of confuses cause and effect. The purpose of the gold standard was to prevent the Federal Reserve from causing runaway inflation by running the printing presses nonstop (since the public could check them by converting their dollars to gold). Then for several years before the crash they did exactly that anyway; and then people checked them by converting their dollars to gold.<BR/><BR/>This conversion to gold may (possibly) have had a role in the crash, but to the extent that it did the real problem was Fed policy in the years leading up to the crash: if they had kept the left of money at a responsible level, they would have had no problem exchanging dollars for gold. Not too different from the role easy credit played in the current downturn.Anonymousnoreply@blogger.com