by Jerry O’Driscoll
“The Weekend Interview” in the Wall Street Journal (A11) is with James Grant. A financial and monetary iconoclast, Grant favors gold over “faith-based” fiat money. He is a trenchant critic of the Fed’s low interest-rate policies for “suppressing the proper functioning of the price system.”
There is an Austrian flavor to Grant’s commentary, as when he defends “good deflation” resulting from “progress.” Bad deflation occurs as the result of a credit crisis. “The Fed refuses to make that distinction.”
Why does he like the gold standard? “The gold standard, he says, citing the ‘late, great’ libertarian economist Murray Rothbard, was the ‘people’s system. If you didn’t like the currency, you could exchange your paper for gold and that sent a message.'”
He also denounces Wall Street bankers, who get the upside while the taxpayer takes the downside. He is describing moral hazard in layman’s terms.
Holman Jenkins did the excellent interview. Read it and enjoy.