Fiat Money: How Else You Gonna Kill 600,000 Americans?
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Fiat Money: How Else You Gonna Kill 600,000 Americans?
A few years ago on these pages, I harshly criticized an article urging New Yorkers to “eat local,” and went so far as to dub the young lady’s column, “The worst economics article ever.” I am here to report that her record has been smashed. Floyd Norris’s recent New York Times article on the greenback is hands down the worst economics article I have ever read. Not only is it jam-packed full of false history, but it uses the falsehoods to justify monstrous crimes, both in the past and present.
The reader with a strong stomach will have to click the above link to appreciate the full enormity of Norris’s accomplishment, but for those with limited attention spans I’ll detail some of its biggest problems below.
Bernanke Saved the Credit Markets?
The article opens up with claims about the health of the world economy that are misleading at best:
Six months after the financial world seemed to be coming to an end, the world’s economies appear to be recovering. Banks that seemed to be on the brink of failure less than a year ago are now able to pay back investments made by the Treasury.
It is too early to declare victory, but the world looks much safer than it did only a few months ago. Credit markets are recovering, to the point that the junk bond market will have its best year ever if it manages not to lose any money over the rest of 2009. The stock market has just finished its best six months since 1938.
If victory is to be had, it will owe a lot to the willingness of American policy makers to set aside cherished policies and simply create money. And that is one reason it is appropriate to pause and celebrate an unheralded bicentennial: The father of the greenback, Elbridge Gerry Spaulding, who was born 200 years ago, in 1809. (emphasis added)
Now hold on just a second. I want to challenge this claim that things are now recovering. Concerning banks paying back their TARP money, I have dealt with that issue here. Regarding the stock market, Norris is right: it’s way up (so far) in 2009. But I don’t remember Henry Paulson, Timothy Geithner, Ben Bernanke, or Presidents Bush and Obama ever justifying their rescue programs by saying, “We need to do this to resuscitate the stock market.” I grant you, they may (and probably did) say that the stock market would be helped by their programs, but pumping up stock prices was never the justification given to the American public.
As I recal…
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