Live from Jackson Hole 2015 Weblogging: We of What Recovery? and all of our friends at the Federal Reserve Bank of Kansas City Economic Policy Conference and Drinking Party are not the only people up in Jackson Hole this week. There is the American Principles Project down-valley somewhere--a conference of grifters and goldbugs, charging their attendees a healthy sum, because, they say, current Federal Reserve policies are dangerously inflationary, and so they need to "bring sanity back to U.S. monetary policy". Their top five headlined speakers: George Gilder--Chairman, George Gilder Fund and former Reagan advisor. Steve Moore--Distinguished Visiting Fellow, Heritage Foundation. Benn Steil, PhD--Senior Fellow & Director of International Economics, Council on Foreign Relations. Peter Schiff--Financial Analyst. Jim DeMint--President, Heritage Foundation.
I have already dealt with George Gilder, Stephen Moore, and the conference organizer Steven Lonegan. Now we come to headliner number 3, Benn Steil. Unlike Lonegan, Gilder, and Moore, Benn Steil is not a liar: he does not knowingly state things that he knows to be false.
He is, however, what Bugs Bunny would call: "a maroon".
Here are five examples:
(1) Benn Steil does not understand the constraints facing countries that do not issue the principal reserve currency: He writes that if the U.S. were to lose its dominant reserve-currency status:
The Federal Reserve would now be forced to operate under external constraints comparable with those imposed by the classical gold standard, under which the US needed more gold to create more dollars.... [T]he US would no longer be able to cover its current account deficits just by conjuring dollars, it would also have to issue debt in euros...
But the Eurozone, Britain, Australia, Canada, Switzerland, and many other countries are all very able to issue their own debt in their own currencies. They are able to cover their current account deficits by conjuring euros, pounds, Australian dollars, Canadian dollars, Swiss francs, and a host of others. They do not have to issue their debt in dollars. They are in no wise "forced to operate under external constraints comparable with those imposed by the classical gold standard." Not at all.