IVIV (8): Nixonizing U.S. Currency

[Richard Fiero]

Mark Kohut wrote:
>yea, I'd say TRP puts it to the Austrians, Von Mises and Hayek,etc., 
>whose economic religion has been on the rise since the 70s.....He 
>certainly goes after many in the Vienna section of AtD.
>
>But, the Von Mises' and Hayek's wanted, still, the Gold Standard, am I right?
>
>So, does TRP score Nixon for going off the GS or, more, score the 
>free-floating Nixon currency that is created in IV?
. . .
You're asking me?
The Free Marketers have taken a hit but they are back. Need a 
discount stock broker? Want to sell your annuity or full life 
insurance for cents on the dollar? What's in your wallet?
The Austrians and Chicago School absolutely hated the elements of the 
Nixon Shock: dump Bretton Woods, wage and price controls and a 10% 
surcharge on imports. They prefer the gold standard which would 
prevent the fractional reserve system.  J.K. Galbraith, a Keynesian 
and Institutionalist, described the fractional banking system as: you 
go to the bank and borrow $1Mil for your biz. They give you a $1Mil 
and they have to have $100K on some government hard drive. You go 
spend it here and there and each recipient deposits their piece and 
each receiving bank now has to loan out ten times what was deposited 
by each leaving one-tenth on some government hard drive. The original 
loan has now created one hell of a lot of money with no backing 
except promises to pay. Fun.
Naomi Klein on the Chicago Boys in Pinochet Chile. She's a little 
over the top but great fun. Henry C K Liu, Brad DeLong and Paul 
Krugman are Post-Keynesians with different tasks to hand.
Institutionalist/Evolutionary Economists and Marxists (Marxians, 
if  you prefer) have differing views.
Nixon just does not completely fit on any particular side. Pragmatist?