It’s been a big year for populist rage.
The summer was plagued with constant political rallies. On Nov. 2, voters turned on incumbents without scrutinizing those whom they chose to elect.
The next day, Dr. Edwin Vieira, a frequent guest on news shows, spoke to George Mason University students and said that the U.S. economy will fail within the next 20 years.
The solution, he claimed, was a return to the gold standard. He’s not the only one; it’s a rapidly growing fad amongst conservatives and liberals alike.
This is not the only issue where ignorance transcends party lines, but it is one of the most egregious.
I haven’t done enough research to know if this “end the fed” movement is a new phenomenon, but whatever the case, knowing would do nothing to ease my nerves.
If the American people do not trust the Federal Reserve, I fear it may be a disadvantage for lawmakers to take heed of what Ben Bernanke suggests.
The Federal Reserve cannot function well without coupling its efforts with a specific fiscal policy. This is because there are four basic ways in which the U.S. government can affect the economy.
Federal Reserve policy as well as fiscal policy set by Congress can be loose or tight. Each combination (loose-loose, loose-tight, tight-loose, tight-tight) creates a unique phenomenon.
However, it has been a very long time since Congress set any policy other than “loose.”
Lately, the same can be said for federal policy. The ideal conditions for this stage of recovery, according to a key Federal Reserve official last Monday, would be for Congress to match the Federal Reserves’ loose monetary policy with a massive tightening of fiscal policy.
This is easier said than done, especially in today’s political climate. The last thing any appointed politician would want to do in the middle of a wave of anti-incumbency sentiment, not to mention the 10 percent unemployment rate, is to raise taxes.
Yet anyone who’s spent even 30 seconds looking at the federal budget knows that short-term cuts are a highly unrealistic possibility.
Instead, as U.S. Treasury Secretary Timothy Geithner proposes, the solution has to be an increase in revenue.
This is why today’s populism is so dangerous. There is no single, attainable goal, as there was in the progressive era with improved working conditions or in the 1960s with a withdrawal from Vietnam.
Today’s populists don’t know what they want but they’ll take to their lawn chairs on the National Mall until they get it.
The most frightening thing about today’s populists is their numbers.
They know nothing about the intricacies of the currency markets, the complex science behind quantitative easing, and the mutual benefits which come with Chinese purchases of U.S. assets. They don’t know about all the good that free trade has done in the poorest countries of the world, or the reality about the number of jobs lost due to outsourcing, and their acquaintances don’t know much either.
If everyone you talk to suffers from the same level of ignorance, concerns without answers start sounding like facts.
When it comes to returning to the gold standard, as dangerous as that idea is, it is as equally impossible to pursue.
But until the day comes when I no longer have to hear my fellow students whispering their fears about trade with China, I’ll not rest easy.
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