Is it a coincidence that the Powell Memo was published and the gold standard ended in the same year? - Politics Forum.org | PoFo

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#15185934
I do not think so.
I think that the rich realized in 1971 that ending the gold standard could prompt some thinkers to conclude that dollars were then just “Status Points” because there was no longer any constraint (except possible inflation) on how many could be in circulation. They saw this reality, and didn't want the people to understand this.

So, they got Lewis Powell to write his now famous memo. It called for the rich to fund new conservative think tanks, chairs in univ. for conservative professors, the elaboration of what has become neo-liberal economic theory, and for its conclusions to be flooded into the mass media. The rich did do these things and they were very successful in keeping the new reality out of the public consciousness.

Link to article about the Powell Memo --- https://www.greenpeace.org/usa/democrac ... democracy/

I again claim that this must have been an intentional program to lie to the American people. I say this because, the neo-liberal theory was based on 3 things.
1] They stopped teaching the history of economic thought, because early econ. writers had different conclusions and definitions for key words.
2] They down played any attempt to base economics on reality or what actually had happened in nations in the past, or in the future either.
3] They based the new theory on proofs that began with assumptions. However, many of the assumptions are false, and they waved this way by claiming they were necessary to simplify the otherwise too complicated reality.
. . . There are 2 problems with this.
. . . . . a] In logic, it is totally and always never allowed to use false assumptions (that you assumed to be true) in any proof.
. . . . . b] Computers were coming available to allow massive repeating calculations to study complicated problems. Soon, mathematicians would use computers to discover Chaos Theory or the study of non-linear equations.

Again I emphasize, that one can prove any ridiculous conclusion if it is OK to use false assumptions as if they were true.
. . . For example, if all animals with backbones that swim in the sea are fish, and all fish have gills, and whales have backbones and swim in the sea, then whales are fish and whales have gills. Or, if this blank piece of paper is a contract that you signed and it says that you owe me and will pay me (on demand) $100K, then you must pay me $100K right now.
. . . Or one from economics, if in a perfect market everyone knows everything about all the stuff being sold in the market, and if the real market is perfect, then the market price is the perfect price for all the stuff being sold in the market. Also, no buyers or sellers are ever tricked into the sale, so they are always satisfied with all transactions in the market. Also, all workers are always satisfied they are being paid enough for their labor.
. . . Or another from economics, if banks are like pawnbrokers and can only lend dollars they have in an account somewhere, and this account is the total of all the deposits made into the bank by its depositors, then the money being saved in banks is being recirculated back into the economy when corps. get bank loans to make investments. Also, if a rich woman uses dollars in a savings acc. to buy a new US bond, this action reduces the amount of dollars that bank (and therefore, the total of all banks) can lend to corps. for investments, and this means Gov. deficit spending with bond sales is competing with corps. in the economy for dollars for their investments, and this will bid up interest rates.
. . . I hope I don't need to list all the false assumptions I used in those examples.

My conclusion from the above is ---
Neo-liberal economics is and always was a knowing attempt to gaslight the American people and its leaders into adopting Gov. policies that would transfer money from the bottom 80% of earners to the top 1% of earners. The entire project was a con job.
. . . The theory was used to prove several false conclusions and the resulting policies being adopted have been a disaster for America and/or the world in several ways ---
1] It furthered the moving of (IIRC) 70,000 factories from the US to Mex. and then to China. Some say this was the greatest mistake any nation has ever made in all of recorded history.
2] It kept the nation and world (for the next 40 years) from heading warnings that CO2 in the air would warm the earth, and this would cause economic damage like forest fires, floods, droughts, large hurricanes, etc. in the mid-term; and would cause disastrous changes in the climate in the only slightly longer-term.
3] It kept the nation (for the last 20 years) from heading warnings that the next pandemic was coming soon, and this blocked all attempts to prepare the nation for covid-19.
4] It kept (for the next 40 years) real wages flat as measured with the CPI being used (and forced real wages down if a more reality based CIP had been used). This caused the working class to be ready to vote for a conman like Trump. And we all saw the disasters that he created. Including the on going assault on democracy that included the assault on the Capitol Building and the new state laws to suppress more votes by Dems and even allowing state legislatures to defy the vote of the people and send the loser to Wash. DC. without any real proof of fraud.
Last edited by Steve_American on 17 Aug 2021 13:55, edited 1 time in total.
#15185954
Under capitalism, society is divided into different social classes with conflicting material interests. These conflicting material interests lead to social and political conflict between these social classes. If the ruling class gain hegemony in the field of ideas and influence over the government - as has happened in the USA since 1980 onwards - then the outcomes will not be good for the other social classes. And this is exactly what we have seen.
#15185964
Potemkin wrote:Under capitalism, society is divided into different social classes with conflicting material interests. These conflicting material interests lead to social and political conflict between these social classes. If the ruling class gain hegemony in the field of ideas and influence over the government - as has happened in the USA since 1980 onwards - then the outcomes will not be good for the other social classes. And this is exactly what we have seen.


Shutup!


I will give very thing I have in worship of capitalism.
#15186870
Steve_American wrote:
I do not think so.
I think that the rich realized in 1971 that ending the gold standard could prompt some thinkers to conclude that dollars were then just “Status Points” because there was no longer any constraint (except possible inflation) on how many could be in circulation. They saw this reality, and didn't want the people to understand this.



The French were doing a run on the dollar, Nixon didn't really have a choice.

It's may be reassuring to think somebody is in charge, but that isn't the case here. We set up a pretty economic system, and then ignored it. Bretton Woods included a way to punish miscreants, but as soon as it was us being punished, we broke the system..

Btw, the rich got a lot more power in the 80s, when kooks were running the government.
#15187560
late wrote:The French were doing a run on the dollar, Nixon didn't really have a choice.

It's may be reassuring to think somebody is in charge, but that isn't the case here. We set up a pretty economic system, and then ignored it. Bretton Woods included a way to punish miscreants, but as soon as it was us being punished, we broke the system..

Btw, the rich got a lot more power in the 80s, when kooks were running the government.

Sorry about the delay in replying.
I don't understand your point.
I assume that in 1971 there was a run on the dollar, and so the rich did some creative thinking and realized that when the world is off the gold standard everything is different. I think Reagan and his people also saw this which is why he was willing to raise the US national debt from exactly $1T to about $4T over his 8 years. If Obama has done the same over his 8 years it would have gone from about $12T (IIRC) to $48T.
. . . The rich saw this and had Powell write his memo.
. . . It doesn't really matter exactly when Nixon acted. The idea was in the air before he acted.

BTW, IMHO, the post WWII system was based on the US buying stuff from other nations. This is what made it stable. The assumption that the US would not be punished for this was part of the basic set-up. In the late 40s and the 50s, Europe and the rest of the world NEEDED the US to buy their stuff, because there was no one else able to do it. They needed dollars to buy US stuff, so they needed the US to buy their stuff.
. . . The US was keeping the price of gold stable at $35/troy oz. This may have been a problem in the long run. Maybe they should have been raising the price of gold 2% a year to cause inflation of 2% per year.
. . . In any case, like you said, Nixon had little choice.

However, all this doesn't change my point. The Powell Memo was the start of a plan by the rich to destroy to economic system that we had had from 1947 to 1970. This system was working OK. One place it was not working was that *all* the benefit from increased productivity was going to the workers and none was going to the rich who were paying to make investments that were not increasing their profits.
. . . IMHO, the right thing to do was to find a happy middle. Going from 1 extreme to the other (like was done) is going to be unstable in the long run. That long-run-time is now.
.
#15187575
Steve_American wrote:

I don't understand your point.



Yeah, you've got some stuff stuck in your head. If you want to get it right, you're going to have to dig into it.

In short, the rich weren't as powerful, Bretton Woods (and our spending on the empire) had everything to do with the run on gold, and....

While we went off gold to avoid behaving responsibly, economic growth was going to make any hard metal currency impossible. You wind up in a bind where the number of dollars you can back up with gold keeps growing. Which means you will eventually undermine the currency's credibility because your gold reserves shrink way past the point were the ratio of hard to paper becomes a joke.
#15187649
late wrote:Yeah, you've got some stuff stuck in your head. If you want to get it right, you're going to have to dig into it.

In short, the rich weren't as powerful, Bretton Woods (and our spending on the empire) had everything to do with the run on gold, and....

While we went off gold to avoid behaving responsibly, economic growth was going to make any hard metal currency impossible. You wind up in a bind where the number of dollars you can back up with gold keeps growing. Which means you will eventually undermine the currency's credibility because your gold reserves shrink way past the point were the ratio of hard to paper becomes a joke.


Please let me elaborate on my last post above.

Global foreign trade is by accounting definotion a zero sum game. That is, for a nation to sell stuff to another nation, some nation must be buying stuff. From this it follows that the net total of all selling minus all buying is zero.

With that in mind, after WWII the US promised to buy or lend more than the value of what it sold. This would let some nations sell more than they bought. This was not possible before the war because the world was on the gold standard, and the nation that was buying more than it sold would or could see its gold reserves drained. Having a nation's gold reserve drained, would be a disaster because the gold reserve and the internal money supply had to be linked (for each nation).

Late, you seem to think that the US needed to be punished for keeping its promise to buy or lend more than it sold. There is always the long run in a situation like this. If every year the US bought more than it sold, then in the long run there would be a lot of dollars outside the US. If some nation decided to stage a run on the US's gold supply, it could do it, and this would result in the US refusing to let its gold supply be drained.

So, I'm saying that this should have been forseen. I don't think that it was. Frankly, I question the motives of France. Why did it want to upset the system by demanding gold? Did it want the gold, or did it want some other follow on consequence to the US? In both cases France failed. It didn't get the gold, and it didn't hurt the US either. It just ended to gold standard for everyone.

Late, I can't know that you meant in that 1st sentence, because you used pronouns like "some stuff" and "it".
.
#15187660
Steve_American wrote:


With that in mind, after WWII the US promised to buy or lend more than the value of what it sold. This would let some nations sell more than they bought. This was not possible before the war because the world was on the gold standard, and the nation that was buying more than it sold would or could see its gold reserves drained. Having a nation's gold reserve drained, would be a disaster because the gold reserve and the internal money supply had to be linked (for each nation).

Late, you seem to think that the US needed to be punished for keeping its promise to buy or lend more than it sold.

So, I'm saying that this should have been forseen. I don't think that it was. Frankly, I question the motives of France. Why did it want to upset the system by demanding gold? Did it want the gold, or did it want some other follow on consequence to the US? In both cases France failed. It didn't get the gold, and it didn't hurt the US either. It just ended to gold standard for everyone.

Late, I can't know that you meant in that 1st sentence, because you used pronouns like "some stuff" and "it".



First, you're still going to have to study this to escape that nonsense.

Bretton Woods didn't take us off gold.. it did set up a money trading system that would punish those that spent too much.

This is history, not me. Bretton Woods is shorthand for hundreds of agreements, it's complicated and massive. I don't have feelings about it in the way you suggest. The reason is that it was prob doomed from the start, by the growth of the economy. Too much wealth, not enough gold to back the currencies...
#15187673
late wrote:First, you're still going to have to study this to escape that nonsense.

Bretton Woods didn't take us off gold.. it did set up a money trading system that would punish those that spent too much.

This is history, not me. Bretton Woods is shorthand for hundreds of agreements, it's complicated and massive. I don't have feelings about it in the way you suggest. The reason is that it was prob doomed from the start, by the growth of the economy. Too much wealth, not enough gold to back the currencies...


Of course Bretton Woods didn't take the world off the gold standard. Nixon did. I said Nixon did in 1971. Bretton Woods was right after WWII.
How did you get so confused about what I said?
.
#15187675
Steve_American wrote:

How did you get so confused about what I said?



"With that in mind, after WWII the US promised to buy or lend more than the value of what it sold. This would let some nations sell more than they bought. This was not possible before the war because the world was on the gold standard.."

This isn't going to get us anywhere.

"In theory, the reserve currency would be the bancor (a World Currency Unit that was never implemented), proposed by John Maynard Keynes; however, the United States objected and their request was granted, making the "reserve currency" the U.S. dollar. This meant that other countries would peg their currencies to the U.S. dollar, and—once convertibility was restored—would buy and sell U.S. dollars to keep market exchange rates within plus or minus 1% of parity. Thus, the U.S. dollar took over the role that gold had played under the gold standard in the international financial system.[27]

Meanwhile, to bolster confidence in the dollar, the U.S. agreed separately to link the dollar to gold at the rate of $35 per ounce."

That was such a sweet deal for us, we really screwed the pooch killing it off.

https://en.wikipedia.org/wiki/Bretton_Woods_system
#15187792
late wrote:"With that in mind, after WWII the US promised to buy or lend more than the value of what it sold. This would let some nations sell more than they bought. This was not possible before the war because the world was on the gold standard.."

This isn't going to get us anywhere.

"In theory, the reserve currency would be the bancor (a World Currency Unit that was never implemented), proposed by John Maynard Keynes; however, the United States objected and their request was granted, making the "reserve currency" the U.S. dollar. This meant that other countries would peg their currencies to the U.S. dollar, and—once convertibility was restored—would buy and sell U.S. dollars to keep market exchange rates within plus or minus 1% of parity. Thus, the U.S. dollar took over the role that gold had played under the gold standard in the international financial system.[27]

Meanwhile, to bolster confidence in the dollar, the U.S. agreed separately to link the dollar to gold at the rate of $35 per ounce."

That was such a sweet deal for us, we really screwed the pooch killing it off.

https://en.wikipedia.org/wiki/Bretton_Woods_system

Are you refuting anything I wrote?
If so, what?
.
#15187815
Steve_American wrote:
Are you refuting anything I wrote?



I don't see this as argument, I am trying to explain history.

One thing I haven't mentioned is that we changed from the world's largest creditor, to being the world's largest debtor, during the Reagan years.

It took me a couple decades to work my way through this...
#15187868
late wrote:I don't see this as argument, I am trying to explain history.

One thing I haven't mentioned is that we changed from the world's largest creditor, to being the world's largest debtor, during the Reagan years.

It took me a couple decades to work my way through this...


Really, I thoght is was earlier. More like the mid 60s.
But, I'm going off my memory, which is not specific.
I do remember thinking and saying that exact statement, I just don't remember when, mid 60s when I was in HS, maybe.
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