I ran across this article by Matthew O'Brien of The Atlantic where he goes on a predictable tirade against the evils of the gold standard. Why, if we disallowed central monetary planning, then we'll be leaving market decisions to the market. God forbid!
This article reeks of the arrogance of mainstream economists who can pull the statistical blanket over their eyes, ignore fundamental economic principles, and consolidate all the variables of life into one graph (in this case, "2 charts").
First and foremost is this paragraph,
Why would anyone want to go back to the bad old days? The gold standard limited central banks from printing money when economies needed central banks to print money, and limited governments from running deficits when economies needed governments to run deficits. It was a devilish device for turning recessions into depressions.
I hate to be the person that has to point this out to O'Brien, but the period between 1800 and 1900 experienced, not only in America, but the entire world, the greatest economic growth in the history of mankind. This period was also a time when America was on a gold standard of some form. Indeed, for a large part of it, the money in circulation was not merely paper backed by gold, but literally the gold itself. In light of this, the fact that central banks were restricted in monetary expansion and governments were restricted in deficit financing hardly seems to be the historical point that bears repeating. Indeed, if anything, O'Brien is undercutting his own argument if it is promoting loose fiscal and monetary policy.