Opinion L.A.

Observations and provocations
from The Times' Opinion staff

« Previous Post | Opinion L.A. Home | Next Post »

Politics: Gold, Sarah Palin and other fevers

Gold There are two things I know for sure: One, I'm not an economist; and two, gold coins are really cool.

On Friday, The Times wrote about a movement in the U.S. to return to the gold standard. The story featured Mike Pitts (who's also not an economist but rather a retired cop):

Pitts, a South Carolina statehouse representative, introduced a bill in April that would make gold and silver coins legal tender in the state. Similar efforts are underway in more than a dozen state capitals, fueled by "tea party" support and antipathy toward the federal government.

The ultimate goal is to return the nation to the gold standard, in which every dollar would be backed by a fixed amount of the precious metal. Economists of all stripes say the plan would be ruinous, but that view is of scant concern to Pitts.

"Quite frankly, I think that economists from universities are thinking within the confines of their own little world," Pitts said. "They don't deal with the real issues."

First, what I know about gold currency comes from a chance encounter decades ago, when I was a young business reporter in Hawaii. As part of a story on gold coins, I visited a dealer, who brought out a stack of South African Krugerrands.

Talk about gold fever: I became an instant '49er. The glint of the metal, the sheer heft of the coin -– I was transfixed.

That lust for gold, however, did not translate into a lust for the gold standard. Why?  Because unlike Pitts and others, I actually believe the people on this Earth who are economists.

This yearning for the past, and for simple solutions to complex problems, is nothing new among Americans. But every day we see more signs of silliness.

On Thursday, Treasury Secretary Timothy F. Geithner met with House Republican freshmen, warning them of the perils of not raising the debt ceiling.

The response?

"He just said it will be 'instant lights out' on America, but he didn't give a basis for that," said Rep. Tim Huelskamp of Kansas, who attended Thursday's meeting but is skeptical of the Treasury secretary.

And then there’s this:

"The notion of default is a myth," Bob Vander Plaats, a conservative activist from Iowa, said at a recent tea party gathering in Washington. "When they reach that limit, they're going to have to prioritize, and the first priority is to pay off your debt."

Now, I'm guessing that neither Tim nor Bob is an economist. But no matter. In today's world, everyone's opinion is as good as the next person's. (Although I wonder if Tim or Bob care about their doctors' credentials, or the expertise of that guy flying the airplane.)

Out on the campaign trail, though, real solutions are plentiful. Take these items from New Hampshire.

First, from the grown-up in the GOP field, Mitt Romney:

Romney said he would teach Washington to respect the Constitution, echoed the "tea party" movement's emphasis on states' rights and called for repeal of Obama's healthcare law. He promised to cap federal spending at 20% of national economic output, a deep cut that tracks the House Republican budget, though he did not say when or how he would reach that goal.

Next, Rudolph Giuliani, who isn't actually running yet  (although in the 2008 race, when he was running, no one could actually tell):

He is considering running because, Giuliani says, the nation is being led in the wrong direction by Obama, whom he described as a "failure."

And then Sarah Palin, who isn’t actually running yet either but loves the spotlight almost as much as some people love gold:

"We have to get back to what made America great," she told bystanders. "The goal here, as it has been with the bus tour, is to get people to understand how important the American spirit is."

Yep, that'll fix our problems. Go back to the gold standard. Don't raise the debt ceiling. Get rid of that "failure" President Obama. And remember, it's all about the American spirit.

Hey, as long as we’re looking to the past, how about "a chicken in every pot" too?


The House votes down a debt-ceiling increase

Will Mitt Romney's religion derail his political ambitions?

Meghan Daum: Why Sarah Palin doesn't get what she deserves

-- Paul Whitefield

Photo: Gold ingots. Credit: Arko Datta / Reuters


Comments () | Archives (7)

The comments to this entry are closed.


Nice article. But why the old gold standard? How about the idea of Hugo Salinas Price?

His idea is to let the central banks continue to make money out of nothing like they currently and will always do. But for the people, the mint will make a silver coin and state a price for the coin. Coins sell and are redeemable at the currently stated price.

But whenever enough money is created and the cost of the metal increases upwards and comes close to the stated price, the price is ratcheted upwards. The stated price is never taken down.

These coins would have legal tender status and could be exchanged with anyone if there were an emergency and the owner of the coin needed something. The change would be given in normal money as is usually done.

The nice thing about these coins is that people would hold them and be protected against inflation. The best of both worlds, right?


Nice comment sam, but how is that different than now? You can buy silver and gold coins now.

The fundamental problem is that Central Bankers and govts. keep printing money out of thin air. Just think. In 1965, you could buy a candy bar with a nickel. That same candy bar is now 35 cents or more. That's called "inflation". Things don't really go up in value. The paper money goes down in value.

Economists are generally against the gold standard, historically, because there just isn't enough gold in the world to keep the economies humming. The best idea I have heard about is to peg the dollar to a "basket" of commodities. If your dollar will buy a loaf of bread now, it should buy a loaf of bread in 20 years.


Bush was no failure like Obama. The economy flourished under his command. The poor were better off too.

I'm just practicing to see if i can stomach the Republican's 2012 efforts..

Alex J. Andrews

As a registered Republican, I believe that a Sarah Palin nomination would result in a landslide victory for Obama, not seen since the Richard Nixon "thunderous trouncing" of George McGovern in 1972.
I'm absolutely shocked that someone with Sarah's purported intellectual acumen could actually run for president without having officially passed the "Quayle Barometer of Political Qualifications", specifically, the now famous "Quayle Potato(e?) - IQ Test".
I've racked my brained trying to determine which cereal box contained former Governor Palin's college degree? I nearly gained 15 pounds in the process of purchasing nearly every type of cereal in the local grocery store.
I believe that I may have finally found the winning box. It just so happened to be a box of "Cracker Jacks". I found her college degree and a little toy as well. I believe that my two - year old son can make some use of that toy. As for her degree, well, let's just say that I can use it as ......
So, I stand corrected about my comment about "cereal".
People are attacking Obama on his possible "Non - USA" birth?
Well, that may, or may not be the case. It may also be true that Sarah Palin was born on the same "Non - Earth" planet as "The Backyardigans" or maybe one of the visitors to the world of "The Wonder Pets".
I could have sworn that I spotted one of those "little critters" hiding behind her in one of her Fox News commentaries!
Unfortunately, that would also make her a "non - native born" American.
Right now though Obama is trying to work in the White House, albeit, without much success. On the other hand, Palin is currently a member of a traveling carnival (or is it a circus??). She is the main act, or should I say, side show. She's demonstrating how someone can actually "blink & smile" and "smile & blink" in unison. Oh, she also does a great "You Betcha"!
Wow, what a skill set. It certainly may qualify her for the White House in the eyes of some Americans that value those abilities in their leader.
Now, all she needs to do is learn how to speak in coherent sentences; then, she'll truly have something to write home about.
At that point - in - time, she may certainly qualify for the privilege of shaking the hands of those who seriously value the presidency as a position of globally transcendant importance!


Thanks Jimbo.

The difference between the proposal of Mr. Price and the current situation is that currently when you buy gold or silver, there is a spread between the buying price and the price at which the dealer will repurchase the coins. Usually this is a few dollars but can be as much as $40 for gold coins.

So if you decide to save your money in the form of coins, you will win over the long term using the current system. However, if you buy coins and then have an emergency and need to exchange the coins before they have appreciated, you will lose money.

What Mr. Price is proposing is that a silver coin be money. This means that it exchanges at a fixed price. There is no spread between the buy and sell price.

The other difference is that under the current system you must first exchange your coins for FRN dollars before you can go to the store and buy something. If Mr. Price's proposal were to be adopted, the coins would be legal tender and could be used as money at any store along with the existing FRN dollars.


Gold standard = depression the like you've never dreamed of.

Partial default = the ultimate debasement of our currency and a collapse of the dollar also resulting in a depression you've never dreamed of.

The Republicans have elected know-nothings. Just look at Diamond not getting on the Fed. A Nobel Prize winner in economics.

Either the Republicans are stupid or they want the country to fail so they can fool the people to regain power. With this bunch it's always ideology over country or anything else.

A more un-American bunch than I ever thought I'd see in my lifetime.


affableman, excellent observation.

You are right, the gold standard is unworkable. The beauty of the proposal of Hugo Salinas Price is that it is not a gold or silver standard.

The whole purpose of coinage is that the exchange price of the coin be above (slightly?) that of the melt value of the coin. For example, the US nickel currently has a melt value of close to 7 cents. This is a problem. These coins are going to disappear from circulation.

The genius of Mr. Price's idea is that the coins are circulated based on weight and do not have an engraved dollar/factional dollar amount. The trading value of the coins is a published number that can change from time to time. In a time of little inflation, the value of the coins will not change. But if inflation begins to increase, the trading value of the coins will keep pace.

All Americans should be very afraid of inflation. It will destroy the value of savings. If savings are destroyed, the whole inverted pyramid of the financial system will teeter over and our country be destroyed with this collapse.

It would be very nice to have a parallel system in place that can preserve the value of savings and yet work in tandem with the existing FRN dollar system. This is exactly what the proposal of Mr. Price is about. Everyone who is worried about the future should take the time to look up his articles and videos. The idea he proposes is very simple and would not take much to implement. The implementation of this idea would be of great worth to the United States of America.



In Case You Missed It...



Recent Posts
Reading Supreme Court tea leaves on 'Obamacare' |  March 27, 2012, 5:47 pm »
Candidates go PG-13 on the press |  March 27, 2012, 5:45 am »
Santorum's faulty premise on healthcare reform |  March 26, 2012, 5:20 pm »


About the Bloggers
The Opinion L.A. blog is the work of Los Angeles Times Editorial Board membersNicholas Goldberg, Robert Greene, Carla Hall, Jon Healey, Sandra Hernandez, Karin Klein, Michael McGough, Jim Newton and Dan Turner. Columnists Patt Morrison and Doyle McManus also write for the blog, as do Letters editor Paul Thornton, copy chief Paul Whitefield and senior web producer Alexandra Le Tellier.

In Case You Missed It...