Escape from False Equivalence in Today's NYT

Editor’s Note: This article previously appeared in a different format as part of The Atlantic’s Notes section, retired in 2021.

Please be sure to read Binyamin Appelbaum’s assessment of a return to the gold standard, in today’s NYT. (Note: Appelbaum's brother is our own Yoni Appelbaum, The Atlantic’s politics editor and author most recently of this great piece on urban wildlife in America.)

I say “assessment,” but the right word would probably be “debunking,” or “demolition.” The virtue of Appelbaum’s news-analysis piece is making clear that an idea advocated “seriously” by several of this year’s GOP presidential candidates in fact has zero support from anyone familiar with the damage it did in the past or its total incompatibility with the global financial systems of the present. As Appelbaum notes:

In 2012, the University of Chicago asked 40 leading economists whether a gold standard would improve the lives of average Americans. All 40 said no.

“You can do a lot better than a gold standard,” said Michael Bordo, an economist and director of the Center for Monetary and Financial History at Rutgers University. He described the political interest in the precious metal as “pretty crazy.”

For your amusement, here is a graphical depiction, from the original U of Chicago survey, of how the economists (who represented a range of views within the field) answered the gold standard question:

From IGM Survey, Booth School, University of Chicago

Perhaps if even one of the 40 economists had dissented, Appelbaum might have felt bound by the conventions of our business to offer a more “balanced” perspective. Something like, “But supporters of the gold standard say that the history of recurring financial panics through the 19th century has been overstated, and that it was a combination of bad luck and bad timing that made has defense of the gold standard appear to intensify the Great Depression in the early 1930s.”

But in the real world story he wrote today, Appelbaum was able to take an admirably let’s-cut-the-crap tone:

In fact, the gold standard did not even work during periods of calm. What is often described as an era of stable prices was more like a roller-coaster ride that ended back where it began, after bursts of inflation and deflation.

Mr. Bordo has calculated that economic volatility in the United States was significantly greater during the gold standard years, and the nation’s unemployment rate, on average, was almost a full percentage point higher.

For further reading on why people who are “serious” about the gold standard shouldn’t be taken seriously on economics or public finance, you can never go wrong with Liaquat Ahamed’s great Lords of Finance or even Michael Kazin’s also-great biography of William Jennings Bryan, A Godly Hero. (In case the connection is not obvious, the gold standard is what Bryan had in mind in his famous “cross of gold” speech.) Or, basically any work of economic history or international-finance theory.

For now, congrats to Binyamin Appelbaum and the Times on this good, clear demonstration of how you move past “on the one hand” false equivalence to lay out the realities.