Did you guess Ron Paul?
How about Ludvig von Mises? Or, what about Murray Rothbard?
Milton Friedman?
Did you think of Alan Greenspan? You got it.
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That was the Alan Greenspan from 40 years ago.
The recent pronouncements by the same man have been quite
different, such as his suggestion to let more skilled workers
in the U.S. As the Boston Globe reported it, Greenspan said:
"Allowing more skilled workers into the country would
bring down the salaries of top earners in the United States,
easing tensions over the mounting wage gap."
With the middle class in America on the ropes, and our nation's
currency in trouble — largely because of the greatest
credit expansion in the history of the world presided over
by Mr. Greenspan himself — now Greenspan has encouraged
the Gulf countries to drop the dollar.
With the American dollar rapidly sinking in value as a result
of inflation, several nations that have traditionally tied
the value of their own currencies to the U.S. dollar will
reportedly break free in the months ahead.
Kuwait parted company with the dollar last year. Now the
United Arab Emirates and Qatar are making similar noises.
And the area's six oil-rich nations that form the Gulf Cooperation
Council are planning to form a monetary union in 2010. These
are Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Oman,
and Bahrain, which are collectively the producers of one-sixth
of the world's oil.
Americans should care about such developments in far-off
lands because their actions — along with signals that
others will follow — send the message that these foreign
nations, customarily comfortable with their ties to the dollar,
have lost confidence in the depreciating U.S. currency. Continued
attachment of their own currencies to the shrinking value
of the dollar has brought America's economic woes right to
their own doorsteps.
It would be easy for many in the U.S. to shrug this off and
say, "Who cares what these Arabs do?" But that would
show a willingness to ignore the reason why traditionally
friendly nations are abandoning their long-standing economic
relationship with the U.S. The clear message coming from the
Middle East is that the flood of currency being injected into
the American system here at home has lowered the dollar's
value wherever dollars are in use. They are posing an important
rhetorical question: Why should we sink along with America?
It is interesting to note that reports about these plans
are not showing up in the U.S. mainstream media. The American
people, already mired in what many have already termed a recession,
aren't being informed about how much damage has been caused
by years of deficit spending, unbalanced budgets, and enormous
influxes of new currency. It’s almost as if no one wants
to mention the cliff towards which the entire nation is about
to plunge over.
Federal Reserve tinkering hasn't overcome huge unfunded spending
programs. Nor can rebates for tens of millions of dollars
derived either from additional borrowing or running printing
presses overtime treat the fundamental problem.
What's needed are severe cuts in government programs —
how about foreign aid for starters? — and a government
committed to living within its means while paying off debt.
If we don't, then America's economic woes will only deepen.
