A smart freshman at a well-known US university is taking the required history course. The professor, Dr. X,, was lecturing on the 9th century when the Chinese invented paper money, but noted that the notes were "backed by gold, just like the US dollar." Waiting until after class, so as not to embarrass the historian, the student politely mentioned that the US dollar has no gold backing, and has not had one since 1971 when Nixon enacted pure fiat money by decree. "Well, if you know so much, maybe you'd like to teach the class!" Then, calming down, he said, "Well, if it isn't backed by gold, what is it backed by?" "Nothing," replied the young man. After a long pause, the professor said, "that's scary."
UPDATE from Bill Schultz:
A close friend attending grad school at a large Texas university recently suggested the book, "The Ugly American," by Eugene Burdick to his class in American Diplomacy. To his surprise, not one student had even heard of it. More surprising, neither the Professor, a PhD in political science, nor his assistant, a grad student in history, had heard of it. This book was required reading in my undergrad days, and a best seller, to boot. I always thought education was about being well-read. I guess not.
UPDATE from Kevin Hall:
This complete ignorance in higher education is not too rare. I graduated in 2003 and had been taught throughout my education that in fact, we were still on a gold standard. It wasn't until I left the government re-education camps that I was free to think for myself and uncovered the horrific truth - that the dollar is merely a piece of paper better suited for use as a fire starter. Without my craving for truth and the mounds of effort and information put out by the Mises Institute, yourself, Ron Paul, and many others, I would be just another drooling, statist drone incapable of employing critical, rational thoughts.