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Paul Krugman, Alan Greenspan and the 'Moral Component' of Money

Thursday, May 14, 2015

It's been a while now as I have been focused on the book I am writing about the stories in Genesis, but one of my other favorite topics has hit the news again...

My all-time favorite academic economist - even better than Jon Gruber because he is actually quite a good writer - has made the news by criticizing former Federal Reserve Chairman Alan Greenspan.  In his blog, Paul Krugman call him the "Worst Ex-Chairman Ever."  Why?  Because he was planning to speak at a conference of "those people" Krugman wonderfully labeled as "combin[ing] social conservatism - its anti-gay marriage, anti-abortion rights, and pro 'religious liberty' - with goldbug economic doctrine."

Let's review: If Krugman agreed to speak to a conference of The American Principles Project he could rightly claim the courage of being willing to present his convictions to a hostile audience.  What chance do you think we have of seeing such courage from the good professor?

In the Wall Street Journal Seth Lipsky notes how Krugman's criticism adds monetary policy to the list of issues that Liberals have banished from the list of 'acceptable' topics of open debate.  Krugman is criticizing Greenspan for having the temerity to address an audience of - GASP! - people who believe conservative monetary policy affords the greatest amount of economic freedom.

Lipsky's salient observation is this:
The fact is that Mr. Krugman, who has devoted his column inches to plumping for inflation, is scared of critics who comprehend that there is a moral dimension to the question of money.
Apologies if all of this seems so much gibberish...  One thing I hope to accomplish in this blog is to bring some clarity to some of these issues.  I have two teenage boys and their future depends very heavily on us adults getting our heads wrapped around these things right now.

Krugman amazes me because he titles his blog on the New York Times website "The Conscience of a Liberal."  OK, so how does one speak of 'conscience' and avoid morality?  Krugman seems especially averse to the idea that there is a moral component to monetary and fiscal policy.  And then he goes on to rail against things like income inequality?  Someone needs to explain to me exactly how this works.  If there is something 'wrong' about income inequality (and I am one who believes strongly that there is) then we must be assuming some system of reasoning to 'right' and 'wrong'.

Can you say 'morality'?

The British philosopher Antony Flew - hardly a paragon of right-wing thinking - observed the existence of a 'low morality'.  This is probably best exemplified by the dictum "do unto others as you would have them do unto you."  Every moral system known to us has a version of this.  On 'low morality' is then built 'high morality' - or the moral systems of the various religions of the world.

So, if you understand 'money' to be purchasing power - or the ability to acquire something needed or desired - would you have someone take your purchasing power for their own purposes?  If not, will you then sit quietly while some (political society) take the purchasing power of others (civil society) to fund deficit spending to support their political priorities?

This can be done by conservatives (R) in the name of defense programs ('guns' - or their political preferences).  Or it can be done by liberals (D) in the name of social programs ('butter' - or their political preferences).  But in either case it is the same confiscation of the money supply - no different than King Charles I confiscating gold from the Royal Mint to pay his soldiers so he could go appoint bishops over the church in Scotland.

So forgive us, Father Krugman, for we have sinned and it has been a very long time since our last confession.

We are outraged that either political party would do unto us what our 'conscience' does not allow us to do unto others... that is, to confiscate our purchasing power in the pursuit of political objectives that miss their mark far more often than they hit it.  Forgive us for looking to a gold-based monetary system to secure our freedom against such immorality.

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