The Resilient Dollar
The editorials in Chronicles’ November issue endorse fiscal probity, the practice of a government’s expenditures not consistently exceeding its revenue. That’s a welcome stance, albeit an awkward one given the espousal by some Chronicles writers of working-class populism, as voiced by entitlements spendthrifts like Donald Trump and his acolytes.
Be that as it may. Contrary to Robert P. Murphy’s and Srdja Trifkovic’s projection of a continuing decline of the dollar’s role in the global economy (in “The Coming Displacement of the Dollar” and “The World De-Dollarized,” respectively), there are good reasons to expect the trend to have a floor and reverse itself. The dollar’s competitors are also fiat currencies, which means that they are debt instruments. All of their sovereign issuers have cause to increase deficit spending, which will be monetized, thereby reducing the value of the currencies in which new debts are incurred. That’s the gist of Greg Kaza’s editorial (“The Political Roots of America’s Inflation Problem”) extrapolated beyond the U.S. and its dollar.
We may understand global currency competition from an Argentine perspective. Javier Milei, a finalist in Argentina’s November presidential runoff, advocates dollarizing Argentina’s economy. Notice Milei’s preference for the dollar over the yuan, the euro, or the ruble. It is uncertain whether the U.S.is more or less likely than other countries to become insolvent. What’s important is what happens after a sovereign default. Here the U.S. has a big edge; we Americans simply have more “stuff” to be appropriated and liquidated. The template for this process was set by the Soviets in the 1920s; an American implementation, engineered by our own caudillo invoking the “democratic process,” would be worse.
Worried readers may take solace from Paul Gottfried’s warning (in “The Administrative State’s Digital Currency Ruse”) against a Central Bank Digital Currency (CBDC). He surmises that “traders and investors” upset by a CBDC monetary regime will “look for alternative means of issuing credit and even to create makeshift currencies.” The obvious, time-tested alternative is gold. It remains reasonably safe. Seizing citizens’ gold in the 21st century would be difficult—unlike simply debiting their CBDC accounts.
Speaking of gold, Robert P. Murphy’s otherwise excellent article makes a numismatic error. Up until the Civil War, as Murphy correctly notes, the U.S. issued money only in the form of gold and silver coins. But the ability of individuals to convert “raw” gold, as Murphy calls it, into gold coins “such as … the $20 ‘double eagle’” was not an option until 1850, when this denomination was first minted and released to the public. Lower denominations sufficed until then.
Crawford County, Mich.
Thanks to Chronicles’ editors for the four articles in the November issue on the decline of the dollar. The analyses were compelling and the data sources informative. It’s clear that the fiscal and monetary authorities are comfortable behaving irresponsibly if such behavior supports their agenda to remain in power.
The social impact of the dollar decline was of course beyond the immediate scope of the articles. Were the United States a smoothly functioning, monolithic society, the analyses presented would still suggest rough sledding ahead. As we are not, a moment’s reflection on societal fractures may be useful.
Out of many possible examples, let me mention an obvious challenge which has a massive human component as well as an unknown economic impact. We are now host to many illegal immigrants, many of whom require government sponsored benefits to survive. It appears that the federal government has given no thought to their futures beyond admitting them and housing some in military bases. Many are being released and sent to various cities with little idea what to do when they arrive.
Recently, I was asked for help at the Phoenix airport by three young men who showed me a crude form containing flight information. I tried English, and then Spanish, and finally got through to them in French. I asked if they had a ticket. They did not, but their form had an American Airlines record locator number.
I took them to the American Airlines check-in and was able to get their boarding passes printed. Do you have baggage? Yes, they each held a small plastic baggie with very little inside. Their flight to Atlanta was boarding in minutes so time was tight. I took them to security so they could get to their gate. We shook hands as they left.
What will they do in Atlanta? How will they survive? There is no answer. We have let in millions like them, giving them no real thought. As the value of the dollar continues to decline and the cost of living rises, their problems in finding a way to live in America will sadly get worse.
I believe it was Ayn Rand who said that one can avoid reality, but one cannot avoid the consequences of avoiding reality. It appears the consequences are here. May God help us all!
—William C. Vinck
Therapy’s Bottomless Pit
Ian Dowbiggin is to be commended for his astute analysis tracing the origins of wokeism to therapism (in “The Therapeutic Roots of Wokeism,” August 2023 Chronicles). He’s broached a subject generally verboten in the America of 2023.
He is surely accurate in stating that “therapism is the true turbulence roiling society today.” The emptiness of this “caring ideology” is evident in the term “mental health,” with its dictionary definition being “the absence of mental illness.” Mental illness is defined in Webster’s Dictionary as “any of a broad range of medical conditions such as depression, schizophrenia, obsessive compulsive disorder, panic disorder.”
Not only does this standard terminology lack substance, but these so-called medical conditions lack any objective scientific basis by which they can rightly be labeled as disease. As Dowbiggin describes, this leads to a “bottomless pit” of “mental health caregivers incentivized to perpetuate … a class of dependents.”
America avoided the French Revolution and the plunge into the Reign of Terror that followed it. In 1789, most Americans believed that the problem of every human being was inherent inside the self, having been born in the line of Adam. Today, the majority fully accept the lie of environmental determinism, while viewing the concept of original sin as a laughing matter.
Fallen mankind hardly needs to be taught that there are no absolute truths in order to claim it as fact. We are vulnerable to nihilism because of the ever-present and natural desire to “realize our humanity,” in the words of therapism, by being our own gods. As it says in Romans 1:25, we have “exchanged the truth about God for a lie and worshiped and served the creature [i.e., mental health, social justice, safe spaces] rather than the Creator.” Without the intervention of the Messiah’s blood and righteousness, our frenzied nihilistic energy can only lead to “weeping and gnashing of teeth” (Luke 13:28).