Wall Street isn't worth it

[bigbadwolf]

Persuasive essay in Jacobin.

 

[Anthony DeAngelis]

I wouldn't necessarily call a far left article calling for government curtailment of the financial sector as persuasive. I'd support a move back towards a gold standard which would curtail the financial sector like this article calls for, but it would also curtail massive deficit spending which benefits the Jacobian supporters.

 

[aaronhotchner]

I wouldn't necessarily call entertaining a gold standard prudent.

 

[Anthony DeAngelis]

I wouldn't necessarily call fiat currency prudent either. The goal of the Fed is the replicate a gold standard currency while allowing for some additional flexibility. I think they've proven themselves to be less than responsible with this task.

 

[bigbadwolf]

I wouldn't necessarily call entertaining a gold standard prudent.

There was a reason the US went off it: in the late '60s the current account deficits the country was incurring, and its loss of competitive position, convinced foreign holders of dollars that the currency might not hold its value. So they started cashing in dollars for gold. US gold reserves were depleted and it looked as if they might vanish altogether. Nixon was virtually forced to go off the gold standard. It's the fiat dollar that's been a precondition for the exponential increase in the amount of currency and stock trading, for shadow banking, for the creation of derivatives and swaps. Quant finance as a discipline would probably not exist as a discipline but for the fiat dollar.