Will Jared Loughner discredit the gold standard?
By Chadwick Matlin
Matlin, a guest contributor, is a freelance writer. The opinions expressed are his own.
Jared Lee Loughner used the American dollar like the rest of us. He used it to pay for classes at Pima Community College, he used it to buy a handgun and he used it to pay for a taxi to the Safeway where he shot Rep. Gabrielle Giffords and 19 others on Saturday.
But apparently the dollar is a currency he despised. Loughner’s YouTube videos are consumed with the idea of creating a “new currency,” one that is nothing like our current, Federal Reserve-controlled greenback. In “Hello,” he writes, “my ambition — is for informing literate dreamers about a new currency.” (All of Loughner’s videos are composed of text or diagrams. He never appears.)
What “new currency” implies is unclear. He seems to oscillate between a new currency backed by gold and silver, and one that allows the individual complete control. But it’s evident that monetary policy was one of Loughner’s many pet peeves. Past violent psychopaths have had their tics — John Hinckley thought he could impress Jodie Foster by shooting Ronald Reagan, John Wayne Gacy dressed as a clown — but Loughner appears to be the first obsessed with the particulars of monetary policy.
In a video called “Introduction: Jared Loughner” he writes, “No! I won’t pay debt with a currency that’s not backed by gold and silver!” But then later, in the same video, he also suggests that it’s not a gold standard he’s after, but a personal one. “Every human who’s mentally capable is always able to be treasurer of their new currency,” he writes in the same video. Later, he speaks about creating a “new language” in the same terms he uses to describe a “new currency.”
What any of this means is difficult to say. Based on his videos and friends’ accounts, he is clearly a man not in control of his faculties, a deficiency that led to the slaying of six innocent people, and the wounding of 14 more. He seems to operate on a logic all his own — a logic that is in part on display in the numerous, confused proofs he posits in his videos.
But if we can’t divine Loughner’s motives, we can better explain the larger monetary context that seemed to influence him. Loughner picked up threads of two different subcultures: one that demands the Fed stop manipulating the dollar, and the other that seeks to remove the Federal government from manufacturing currency altogether. This is not to say that these monetary subcultures drove Loughner to kill. But it does suggest they were two of his ideological sanctums.
The idea of a gold-backed dollar will be familiar to Ron Paul supporters and anyone older than 78. That many years ago, the country determined how many dollars could be in circulation based on how much gold it possessed. This, theoretically, would help prevent total financial collapse, since the currency would always be rooted to something tangible. The dollar was so pegged to gold that Americans could use gold as legal tender. Then, in 1933, Franklin Roosevelt seized private stashes of gold, and in 1971 Richard Nixon explicitly uncoupled the dollar from gold.
Now, the Federal Reserve can print money whenever it likes, a technique it — and most economists — says it needs to react to an ever-changing economy. Ron Paul and other monetary critics worry that will lead to inflation — if the Fed spools $600 billion into the economy whenever it feels like it, that will surely come back to bite us in the ass. The answer to controlling inflation and the deficit, according to Paul and others, is to get us back on the gold standard. Never mind the practical complications like those outlined in this November 2010 piece from Slate. They’re short-term problems that are far less painful than the long-term ones we all have coming. The most important thing is that the government, and all the corruption and greed that comes with it, is removed from the till. That’s the kind of libertarian ethos that Loughner’s videos sometimes advocate.
And then there’s the other, more chaotic “new currency” that Loughner hints at — one in which we are all able to be treasurers of our own currency. While few have advocated individual coinage, there have been scattered attempts at local currencies. For years, Bernard von NotHaus was the economic architect behind “Liberty Dollars,” silver coins that local merchants in some like-minded communities would accept in place of dollars. (Ron Paul eventually made his way onto the coin as a kind of honorary hero/mascot.) Von NotHaus was arrested by the FBI in 2009 for producing a currency that impersonated the U.S. Mint’s.
For advocates, a side benefit is that it breaks up the federal government’s monopoly on currency. For those who believe markets can solve everything, creating competing currencies only leads to further benefits, perhaps including the downfall of one not backed by gold. In Virginia, a state representative wants the commonwealth to start its own currency. He suggests that the state should look into creating a competing currency because “the Federal Reserve System’s currency is not redeemable in gold or silver coin or the equivalent in bullion,” which contributes to “the ever-increasing instability of the Federal Reserve System.”
Currency activists aren’t going to wilt away just because a mass-murderer is associated with some of their views. With the Tea Party’s rise, they have far more reputable spokespeople for their agenda.
But Loughner certainly won’t help them find more respect among the broader public. There are plenty of gold standard activists, and plenty of people who want to create a competing currency to the dollar. But only one of them shot 20 people. He — not the activists’ new currency — is the one to truly fear.