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The New York Times versus Ron Paul

December 28, 2011

The New York Times


As you claim that Ron Paul’s belief that the Federal Reserve should be abolished disqualifies him for the presidency (“Mr. Paul’s Discredited Campaign,” December 27), and thereby appear to be convinced that no alternative to the Fed could possibly do better, we wish to alert you to our recent research reaching the opposite conclusion (“Has the Fed Been a Failure?” Cato Institute Working Paper no. 2, forthcoming in the Journal of Macroeconomics). We wonder as well about the grounds, apart from mere a priori convictions, for your contrary opinion.


George Selgin, professor of economics, the University of Georgia;
William Lastrapes, professor of economics, the University of Georgia;
Lawrence H. White, professor of economics, George Mason University.


  1. Mr. Paul’s Discredited Campaign, editorial, NYT, 12/27/2011

    “Ron Paul long ago disqualified himself for the presidency by peddling claptrap proposals like abolishing the Federal Reserve, returning to the gold standard, cutting a third of the federal budget and all foreign aid and opposing the Civil Rights Act of 1964“.



    1. pretentious but insincere or empty language: His speeches seem erudite but analysis reveals them to be mere claptrap.

    2. any artifice or expedient for winning applause or impressing the public.

    1. sham, humbug, hokum, nonsense, bunk. (1)

    Upon further review, the opening paragraph quoted above is merely vilification by denying legitimacy with absolutely no supporting evidence to boot. An old debating stratagem. Better yet, the paragraph itself is “claptrap” [pretentious but insincere or empty language] as no evidence is forth coming. Hence the author might have reconsidered using the term “claptrap” within a “claptrap”. Ah, the evil of it all!


  2. I don't go out of my way to defend Ron Paul–largely because I'm critical of many of his views as well, but for different reasons–but this opening salvo of the editorial nearly made me fall out of chair.

    This sort of reminds me of your earlier post about feeling compelled to defend the gold standard against mindless attacks levied against it by writers who speak entirely out of ignorance. It's one thing to question Ron about the newsletters. It's quite another to throw the man under the bus a priori without demonstrating the slightest hint of journalistic integrity.

  3. Mr. Heasley and Scott: your reactions to the editorial are quite like my own. Indeed, I found myself wondering whether Mr. Porter, who penned the piece on the gold standard that I responded to two posts ago, was also the author of yesterday's attack on Ron Paul. Were "clap trap" like DNA, I'd be inclined to conclude that the two pieces share a common ancestor.

    1. Very good reply, George, regarding the editorial. I believe Americans are starting to come around to understand the concept of free banking and competitive currencies. Keep up the good work.

      Michael Reber, Tokyo, Japan

  4. Offensive hyperbole from a few newsletters a couple of decades ago is all the dirt opponents have on Ron Paul, so they'll sling it far and wide. Paul's long-time followers aren't discouraged, and the hyperbole will actually attract voters who might otherwise reject Paul for inadequately virulent nationalism. I don't enjoy the company of virulent nationalists, racists and homophobes, but I am convinced that Paul shares none of their core values.

    Summarily dismissing substantial proposals, like ending the Fed in favor of free banking, while focusing narrowly on emotionally charged snippets and guilt by association, is clearly a diversionary tactic. The nameless, faceless editorial writer could address incendiary statements peddling a newsletter without the summary dismissal, and he could address the substantial proposals with a relevant rebuttal, but he doesn't.

    I hate politics precisely because rhetorical tactics of this sort always dominate the debate. If push ever comes to shove on "free banking" reform, the same tactics will limit the debate to narrow options like gold vs. a frozen stock of fiat money. Advocates of gold will dismiss the historical debate over silver with irrelevant, ad hominem references to William Jennings Bryan's religion and the like. [I'm not suggesting that anyone at this site would do so.]

    A free market in the standard of value for extending credit is hardly on the table here, much less in any political debate among vested political interests vying to impose one standard or another by force, but though I possibly differ with Ron Paul on this specific point, the difference is hardly enough to shift my preference toward competitors with whom I differ far more or to withdraw my support from the duopoly entirely by supporting none of the Republicrats, as I usually do.

    I'm not sure I differ with Paul on this point, because I haven't seen him advocate imposing a gold standard. He advocates competition. At worst, he advocates state authority to impose either gold or silver, but even if I accept Paul's Constitutional theory, the Constitution does not require a state to impose a gold or silver standard. It only prohibits a state imposing anything else as a legal tender. It doesn't prevent a state from accepting any standard that specific people choose themselves by contract exclusively amongst these people, which is the only system I call "free banking".

  5. The New York Times piece is standard international establishment elite "liberal" tactics.

    Just state that X, Y, Z, opinions are unaccpetable – and that, somehow, is supposed to make them unacceptable.

    The idea that one must present ARGUMENTS and/or EVIDENCE for one's point of view does not seem to often occur to New York Times writers (or to so many others of their kind).

    As for the specific issue of the Federal Reserve system…. Both aprioi reasoning (argument) and the history of what has happened to the Dollar since it was established (evidence) are very much against the Fed – but (see above) neither argument or evidence seems to matter to NYT.

    Congressman Ron Paul is not going to be the candidate of the Republican party – but if he wins in the Iowa Caucus his victory there will stimulate interest in his two central ideas. They may even be taken up after January 20th 2013 (if only for the ultra selfish reason that whoever is elected President will not want to President in some sort of "Mad Max" situation – with civilization, and the comforts of the office of President itself, collapsing around him).

    Contrary to the msm (and others) the two central ideas of Ron Paul are NOT hated of Jews and blacks – they are, in fact, as follows.

    That the Federal government spends vastly too much money and is heading towards defacto bankruptcy – and, therefore, government spending must be RADICALLY REDUCED.


    That the finanical system (from the Federal Reserve on down) is a vast credit bubble – which is totally unsustainable. Of course people can argue over what should replace the current system – but the starting point (that the current system is no good) has to be established first.

    Both of these central ideas happen to be TRUE.

    The arguments that Ron Paul (and many others) have made, and the evidence that has been presented, show that these two central ideas are true.

    Should a person, including a President, wish to save civilization (and why should they not wish to save it?) the fact that these two central ideas are true, should form the basis of their policy.

    Even if (given the corrupt and debased nature of the political process) these two central ideas may not form the basis of their election campaign.

    1. "Just state that X, Y, Z, opinions are unaccpetable – and that, somehow, is supposed to make them unacceptable"

      Well put, as was the rest of your comment.

      My hat is off to you, sir.

  6. The Gray Lady has long been in bed with Wall Street banksters and cannot afford to even contemplate life without her Fed and other banking lovers. The Ron Paul editorial says much about the author(s) (devious weasel, craven coward, cheater, liar), and nothing whatsoever about Ron Paul's positions.

    Regarding the Fed: The Fed's dual mandate: a stable dollar and full employment. How is the Fed doing? Unemployment: 16.6 percent of the workforce ( How about stability of the dollar since inception of the Fed: The Dollar of 1913 is worth less than 4 CENTS today! (

    1. Well, by those criteria, it has failed miserably.

      But, if you look at it's true mission, bleeding the American people dry, it's done a bang up job!

  7. George,

    From your CATO piece…I take exception…

    $100 in 1790 was a small fortune, which, by 1913 it most certainly was not! These varying measures of worth are troves of ore for minting the coin of choice. Certainly your use to the reader is more of a blindfold and a quick spin 'round.

    Why would you use such a dubious measure of price stability without reference to wages or purchasing power or welfare?

    A handful of grain in 1790 might have been ground into flour by the housewife and combined with milk and eggs and butter obtained through her or her family's labor to finally produce a loaf of bread. By 1913 that equivalent grain and inputs were made into bread available for purchase that had embedded all of the equivalent housewife's labor and many other labors. Though the value of that loaf of bread might have stayed constant relative to a CPI it was now just one of many more consumer choices.

    Since the average wage had increased about 5 times by 1913 and the CPI by only 8% I would argue that it was low hanging technological fruit, favorable demographics, and immigration that kept a lid on the general price level through successive generally benign deflations caused by the aforementioned factors and not through free banking. But why has there been inflation since 1913 that didn't appear before for over 100 years? It could be that general wage inflation began to impact the general price level as urban population increased. Increasing economic complexity probably exerted price pressures (friction?) in ways that improvements in productivity could not generally ameliorate. (And it could be argued that concentrated production and the emergence of monopoly and oligopoly which only began to appear after the Civil War and to account for a larger share of national output produced distortions to the power of price setters.)

    Overall, it could be argued that Governments and Central Banks have little control over economic changes and that seeming correlations of policy and economic variables is a short run phenomenon that disappears in the longer run as knowledge and technique grow and change to alter the economic landscape.

    Stanley Lebergott, if were alive, would argue that in real terms the average American consumer is much better off today than in 1970. Isn't that the real measure of economic success and not whether we have a particular monetary arrangement? Whatever is the medium of exchange, it is just an agreement. It seems to me if the price level is highly uncertain then the credit markets won't lend long but that is never the case is it? Future inflation expectations, if biased positively or highly uncertain, would put upward pressure on long term rates but we are not seeing that in corporate bonds. You might argue that the growth in the money supply has signalled that uncertainty but money velocity continues to fall signalling deflation.

  8. Consider the Fed as a source rather than cure for financial instability angle in light of the opening paragraph's of Thomas Paine's "Common Sense"

    "SOME writers have so confounded society with government, as to leave little or no distinction between them; whereas they are not only different, but have different origins. Society is produced by our wants, and government by our wickedness; the former promotes our happiness positively by uniting our affections, the latter negatively by restraining our vices. The one encourages intercourse, the other creates distinctions. The first is a patron, the last a punisher.

    Society in every state is a blessing, but government even in its best state is but a necessary evil in its worst state an intolerable one; for when we suffer, or are exposed to the same miseries by a government, which we might expect in a country without government, our calamities is heightened by reflecting that we furnish the means by which we suffer! Government, like dress, is the badge of lost innocence; the palaces of kings are built on the ruins of the bowers of paradise. For were the impulses of conscience clear, uniform, and irresistibly obeyed, man would need no other lawgiver; but that not being the case, he finds it necessary to surrender up a part of his property to furnish means for the protection of the rest; and this he is induced to do by the same prudence which in every other case advises him out of two evils to choose the least. Wherefore, security being the true design and end of government, it unanswerably follows that whatever form thereof appears most likely to ensure it to us, with the least expense and greatest benefit, is preferable to all others."

  9. I smiled when I saw the use of "a priori" in your letter. I saw it as an intellectual swipe, but I think it probably went over their, even Krugman's head.

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