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Steve Kangas

As you can see by his wikipedia page, it is short, but dense; he was formerly a member of the proto-national security state, switched from conservative to radically liberal, was waging a war against the overclass, and died of mysterious circumstances involving a complex web of political bureacracy - though you may have to follow the links to learn that one.

What is important about Steve is that he has laid the foundation for the ideological destruction of the exact kind of Austrian inspired libertarianism spread by principal libertarian pope Ron Paul.

For me personally, before I got a hold of Kangas I still had libertarian leanings. He presents the evidence in a concise and objective matter, but with a zeal that is felt through the words.

The most important website pertaining to Kangas' thought is a mirror of liberalism resurgent.

But I suspect you will want to learn more about how exactly Steve Kangas had so thoroughly destroyed everything Ron Paul believed 2 years before he died and 15 years before Ron Paul was relevant to us now.

More below.

Myth: The gold standard is a better monetary system.

Fact: The gold standard causes deflation and depressions.

Steve starts with the gold standard on his 'myths about economics section.

Ron Paul and the Austrian school in particular are fetishists for the Gold Standard. The idea is that fiat money gives control of the money to a corrupt social structure and out of the hands of individuals in the market. Or something. If you go to, or dive through any of the libertarian usenets, you know that concepts and the axioms they are based upon differ from author to author.

Regardless, the gold standard is supposed to be the economic panacea that cures everything that ever went wrong with the American economy - and every economy ever.

Steve summarizes well:

The far right advocates the gold standard because it gets government out of the business of controlling the money supply. They fear that printing money creates inflation, and retracting money causes recessions. But the opposite is also true: printing money cures recessions, and retracting it cures inflation. Governments in the last 60 years have used these policies with tremendous success. There has not been a single depression or bank panic in any nation anywhere in the world using Keynesian monetary policies. But during the Gilded Age of the late 19th and early 20th centuries, depressions and bank panics were common. The historical record is so strong that mainstream economists reject the gold standard almost universally.

And it's true: even the most hardened, soulless neoliberal/neocon thinks the gold standard is a ridiculous idea.

Ron Paul has been an advocate of the gold standard and open competition in currencies for many years. He is the Federal Reserve’s most outspoken opponent in Congress and has frequently questioned Alan Greenspan and Ben Bernanke about the Fed’s actions.

One thing I will note about Ron Paul, which endears him to people, is that his anecdotes and invitations to imagine things resonate very strongly on a basic level; everyone knows the Fed stinks and Ron Paul is the only establishment figure that ties American traditionalism with 'common sense'. Dangerous indeed.

In one simple paragraph, however, the previously linked Kangas annihilates the Gold Standard with the facts:

What are the benefits of the current system? The most important has already been mentioned: the elimination of depressions. Being able to expand the money supply in times of unemployment and recession is a critical tool for government. Before World War II, eight U.S. recessions worsened into depressions (as happened in 1807, 1837, 1873, 1882, 1893, 1920, 1933, and 1937). Since World War II, under Keynesian monetary policies, there have been nine recessions (1945-46, 1949, 1954, 1956, 1960-61, 1970, 1973-75, 1980-83, 1990-92 ), and not one has turned into a depression. In fact, no nation in the world has suffered a depression under Keynesian policies.

That's right! As imperfect as Keynesian-ism is, andit is imperfect; the Austrian school and the Gold Standard are backed up by nothing less than 130 years of failure!

And fiat money also gives economists a chance to tie the appropriate size of the money supply to what's actually happening in the economy. In the end, the amount of gold a nation has is completely irrelevant to its level of economic activity. Gold is a commodity that experiences price swings. A change in dentistry or electronics is enough to change the entire market. To see how unrelated it is, consider the following trends. Since the U.S. dropped the gold standard in 1971, the price of gold has risen tenfold. But consumer prices have risen only two and a half times. If the U.S. had instituted a full gold standard in 1971, the result would have been the worst deflation since the Great Depression. And considering that widespread unemployment is usually the result, not deflation, it is easy to see the why such a policy would increase the risk of a depression.

15 years ago the Gold Standard was calling for a severe depression, now that Gold Standard would literally end America.

Now I'll end here by saying most of the same support that Austrians get to keep themselves relevant despite their academic exile for crankness, goes directly to Ron Paul. So when you're on facebook, or dredging through huffingtonpost, or when that angry friend of yours is bitching about the Fed, they are in some way connected to Austrian economic thinking; especially the ones who are sold on the Gold Standard idea.

They are the most haughty, arrogant, entitled douchebags you've ever met. It's like they have some bullshit secret knowledge that makes them an authority all economic issues. Well I will leave you with Kanga's devastating critique of Austrian theory:

Myth: The Austrian School of Economics is "apart and above" mainstream economics.

Fact: The Austrian School is a classic example of crank science.

Originally posted to Ecclesiastaverbs on Sat Jan 07, 2012 at 12:24 AM PST.

Also republished by Daily Kos Phazebook Progressive Social Networking Group and Community Spotlight.

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