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Thursday, September 13, 2012

The gold standard and the election of senators

By Samuel G. Howard In

It’s a great disservice to label the Republican Party conservative. In reality, many of their proposals are anything but conservative. Dwight D. Eisenhower was a conservative. Paul Ryan is a reactionary. 

Conservatives want to conserve, ideally by keeping what works and not doing anything more. That’s a fine notion (which has limits). However, reactionaries want to drag down anything that’s changed. They create false ideals of any era and wish to return to them (think of the romanticism of the 1950s; one of America’s most socialized, dominated by conservatives, and wrapped up in McCarthyism and Jim Crow).

This romanticism is why the Founders have taken on such mythical proportions, especially among reactionaries. It would be a lie to tell you that the Founders were all of one mind, and I’ve pointed out that Glenn Beck’s beloved Tom Paine was one of the most left-wing members of the Founders. Americans should also note that the Early Republican Era limited democracy to white males who held property valued above a certain threshold. These… complications, don’t matter to reactionaries.

The reactionary mind is nothing if not steadfast in its foolishness. So witness the two stupid ideas that you thought had been left in the dustbin, being brought up by reactionaries.

1. Repealing the 17th Amendment

Do you like voting for your U.S. Senators? Yes? Well, guess what? You’re a threat to states’ rights, you dirty louse! The nearly 100-year old 17th Amendment (birthday either April 8 or May 31 of 2013, depending on your count) is under assault from Ron Paul supporters and Tea Partiers alike. This is the amendment that stopped state legislatures from appointing senators, and mandated their direct election by the people of their states. 

Now, I’m sure it’s unlikely Rhode Island conservatives will be too adamant in proposing it (they’d never have a Republican senator for the foreseeable future if that was the case), but “red” states are increasingly finding people willing to step up and say it, like U.S. Congressman from Arizona Jeff Flake.

The argument goes that essentially, prior to the 17th Amendment, the House of Representatives represented the collective people of the United States, and the Senate represented the states of the United States. Thereby balancing the interests of the people of the United States against the interests of the states of the United States. 

In this argument, the 17th Amendment made the Senate just a smaller version of the House.

Of course, it’s all reactionary bull. The Constitution handily leaves the running of elections up the states. This is why the Dorr Rebellion was contained to Rhode Island and not all of New England; the voting requirements of wealth had been eliminated in the surrounding states. Senators were quite capable of being directly elected by their populace (if the state government wanted them to), and indeed, were. 

But in the reactionary retelling, for some reason that’s not quite clear, it’s impossible for the people of the state to collectively elect someone who will represent their interests. They need the middleman of the state legislature to do that. Why? Because… uh, well, you definitely shouldn’t get a say, you horrible progressive you!

Now, I needn’t tell you that this is a directly assault on liberty and democracy by the very sort of people who always pay lip service to liberty and democracy. But the worst part of this is that the 17th Amendment wasn’t even adopted to expand democracy; that was merely a fortunate byproduct. It was largely adopted to prevent corruption by monied interests, the same sort of corruption everyone worries about today. 

William A. Clark: "I never bought a man
who wasn't for sale"
See, in Montana during the 19th Century, a man named William A. Clark bought his U.S. Senate seat not once, not twice, but three times. He purchased it directly from members of the Montanan state legislature. His defense? “I never bought a man who wasn’t for sale.” Clark’s blatant corruption was not only the source of the 17th Amendment, but also Montana’s Corrupt Practices Act which was struck down by the Supreme Court earlier this year due to their ruling in Citizens United.

In a state where legislators often go down for paltry sums, it’s every Rhode Islander’s duty to laugh any fool who suggests this idea out of the room.

2. Returning to the Gold Standard

This one seems primarily advanced by people who don’t understand the concept of money; which turns out to be the Republican Party, who have announced that a new Gold Commission will be part of the party platform.

The last Gold Commission, inaugurated by President Reagan, concluded that the gold standard was a bad idea. But hey, Reagan was a moderate by modern Republican standards (and a traitor Democrat, so a flip-flopper as well). Gold, here we come!

This article by James Surowiecki for IEEE Spectrum does a good job of explaining how exactly money came to be. I’ve linked to the part where the gold standard is both introduced and eliminated. Essentially, your money is backed only by belief. The one dollar note in your pocket? Not worth anywhere near one dollar. You believe that a dollar is worth a dollar, and so does everyone else, so it is. 

Try purchasing a drink with a £20 note. Sure, it’s worth more than $20, but few stores in America will accept it. It’s worthless to them, because they don’t believe in its worth. It’s a scary thought, nothing more is behind your money than collective faith in your government and each other. Well, it’s the sort of thought scary to those who have no faith in their government or fellow humans.

But here’s the thing: gold has no intrinsic value either, beyond being shiny and malleable. So the worth of gold is entirely based on the same faith that props up paper money. Even when the gold standard was around, there was always more money than it was worth in gold. And when governments needed more money in World War 1, they just completely changed how much gold was worth so they could pay for war supplies. 

The other problem is that gold causes massive deflation, since governments can’t print money unless they find more gold (unless they’re arbitrarily changing its value). And if you’ll remember, deflation was a major problem in the Great Depression, and not coincidentally the point where most countries abandoned the gold standard.

Returning to the gold standard would be an utter disaster for the American economy, largely due to the rise of credit (read: debt). The gold standard would contract the money supply to such an extent that everyone would be hopelessly mired in debt; rather than in the current system where everyone is mired in debt, but they think they can get out of it. 

In fact, the gold standard has prompted multiple battles against it, led by people who were helplessly in debt: Revolutionary Era rebellions (Shay’s Rebellion, the Whiskey Rebellion, the Regulator Movement) and the farmers of the Populist Movement (the cry against the gold standard was famously summed up in William Jennings Bryan’s “you shall not crucify mankind upon a cross of gold!”). It’s unfortunate it took the Great Depression to wean us off of it, and Richard Nixon to kill it entirely.

If you really wanted to back money with a source of intrinsic value, you’d probably make it backed by a Calorie. But that just sounds stupid doesn’t it? Far more sensible to back it with a shiny piece of worthless metal that has to be intensively refined before you can get any use out of it.

I used to believe in Dollo’s Law, which states that once an organism has evolved past a specific stage, it can never revert to that stage. I thought that the law could apply to society as well: once we’ve stepped away from something idiotic (like the gold standard or having state legislators select our senators based on which candidate gives them the most money).

 But I’m beginning to see the complete callousness of people. You hear it in the elitist idea that there should be an IQ test or some such thing to vote; the kind of people who say that both hate their fellow citizens and are completely oblivious to the fact that Jim Crow laws used poll tests to disenfranchise black people.

But the recent combination of Gilded Age market-run-amok economic policies being mashed into Gilded Age social conservatism is making waves in this country that threaten to bring it down. 

I hope that this is the last hurrah of a dying set of ideologies; younger Americans believe more strongly in government interventionism and have moved out of collective control of their churches (while remaining just as religious). But nothing is inevitable. It was once ridiculous to think you could eliminate the protections that were put in place to prevent a second Great Depression. But they did it. Even stupid policies need to be resisted.

Samuel G. Howard - A native-born Rhode Islander, educated in Providence Public Schools, went to college in North Carolina and a political junkie and pessimistic optimist.