No to Judy Shelton

For many years, Shelton advocated tirelessly for a gold-backed dollar, 0 percent inflation, and higher interest rates. After the financial crisis, when the U.S. had a prolonged spell of low inflation and high unemployment, she argued that the Federal Reserve’s efforts to foster a recovery posed too great a risk of raising prices. High and variable inflation, such as we experienced in the 1960s, is an evil that the central bank can and should avoid. Regarding inflation as always and everywhere the chief threat to an economy, on the other hand, is an error that can trap economies in depressions. It is an error to which Shelton’s ideology makes her especially prone.

Advertisement

President Trump has very different views. He wants low interest rates, does not worry about inflation, and shows no sign of caring about the gold standard. During his presidency, these views have been right in their practical upshot more often than not. What is worrisome is the extent to which Shelton has echoed Trump’s views without even acknowledging how they differ from the ones she has expressed in the past, let alone explaining her change of mind. She wanted tighter money in the depths of recession a decade ago, and then advocated looser money at the height of a boom. A steep increase in the price of gold, which once would have alarmed Shelton as an indicator of future inflation, has not given pause to her in her current incarnation.

Join the conversation as a VIP Member

Trending on HotAir Videos

Advertisement
Advertisement
Advertisement