My E-Mail To Eugene Robinson and the First Appearance of Fiat Currency

 In regards to his Washington Post column today, I pulled a Don Boudreaux:

Dear. Mr. Robinson,

Your reference to Ron Paul’s desire of “reducing the federal government to a few clerks writing with quill pens on sheets of parchment” in today’s Washington Post editorial is nothing short of a blatant misunderstanding of his policies.  While the humor in your statement is not lost on me, I cannot help but feel like you are short-changing the one Republican candidate for president that actually has an energized and loyal fan base and would not waste their time watching a reality show called “Ron Paul’s Texas.”

Ron Paul supports such things as the de-criminalization of marijuana, withdrawing our troops from Iraq and Afghanistan, drastically cutting the defense budget, and allowing gays to serve openly in the military.  Surely you can agree with these proposals.  While you may disagree with him on social spending issues, a more comprehensive look into what Ron Paul actually stands for may be beneficial.  You might find that you have more in common with him than most conservatives.

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James E. Miller
Shippensburg University Class '11
B.S.- Public Administration
Minor- Business
Staff Columnist-The Slate-Shippensburg University Student Newspaper
Blog: http://www.millergd.blogspot.com/

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Sometime ago, I emailed Robinson about something and never got a response.  I am not expecting anything different this time.  I contemplated bringing up the raging hypocrisy he engaged in a week or so ago, but decided against it in the end.

If you need a laugh after Robinson's childish criticism of Ron Paul take the Guardian's Charlie Sheen v Muammar Gaddafi: whose line is it anyway? quiz. Ten quotes that border on insanity are presented and you have to guess whether Sheen or Gaddafi uttered them.  I scored 4 out 10 my first try.


As promised in the post title,  Rothbard explains the origin of fiat currency.


Did You Know that:

the world had never seen government paper money until the colonial government of Massachusetts emitted a fiat paper issue in 1690.

You can never trust those New Englanders.

I will end with a few good quotes on why cash is not credit and the importance of cars to indivdualism.

 Yesterday, I posted, in Caroline Baum's words, how the Fed socializes risk:

Because the Fed turns its profits after operating expenses over to the Treasury, any reduction in profits means a bigger deficit and higher taxes for the rest of us.

In today's Mises Daily, Robert Blumen does a great job explaining the difference between cash and credit:

Portfolio managers usually think of cash as money proper plus liquid assets that can easily be sold for money proper at their par value. While it makes some sense to think this way from an operational standpoint when running a portfolio, the two assets are not the same thing. Cash is not a form of credit nor is credit a form of cash. Financial securities such as money-market mutual funds and short-term Treasury debt are not money. They are credit instruments that provide a stream of money payments and can be sold in the market for money. A change in the total quantity of these securities issued does not represent a change in the money supply. When new securities are issued, the buyer purchases them from the government with money.

The appearance that liquid debt securities are no different than actual money depends on the willingness of buyers to pay par value for their debt. The liquidity of these cash-like assets is not a constant, but is a variable. During periods of financial crisis, some formerly liquid assets may become quite illiquid.

So if the Fed purchases treasury securities, and they lose value and the Fed receives a net loss for its purchase, do taxpayers see a net loss then as well because the potential profit the Fed could have made does not go to the Treasury?  If treasuries become riskier, their yield goes up.  But I don't think this new yield gets applied retroactively to the original treasuries purchased.   Unfortunately, I don't have the finance education to really answer the initial question right now.

And now George Will, eloquent as always, explains why progressives hate automobiles:

To progressives, the best thing about railroads is that people riding them are not in automobiles, which are subversive of the deference on which progressivism depends. Automobiles go hither and yon, wherever and whenever the driver desires, without timetables. Automobiles encourage people to think they—unsupervised, untutored, and unscripted—are masters of their fates. The automobile encourages people in delusions of adequacy, which make them resistant to government by experts who know what choices people should make.