by Nick G. International Man
NY Times columnist Paul Krugman recently penned an article in which he comes out in favor of capital controls.
Not surprisingly, his argument follows the near cookie cutter justification used by governments throughout history to seize more control over their citizens.
- Spuriously shift the blame for the crisis onto foreigners.
- Claim the increase in government control is for "your own good."
Krugman doesn’t see irresponsible government spending and the resulting debt as the core cause of recent crises in Europe and around the world. Instead, he blames inflows of money by undefined foreigners.
He even says that the US, too, is victimized by inflows of foreign money when he claims, "It’s not just Europe. In the last decade America, too, experienced a huge housing bubble fed by foreign money."
According to Krugman, it’s not the fault of the Federal Reserve’s artificially low interest rates for blowing up the housing bubble, nor the proliferate spending habits of European welfare states for causing the debt crisis, but rather those vague evil "foreigners" who are to blame. And we need government actions (i.e. capital controls) to protect us.
Nixon followed this pattern, too, when he infamously severed the last link of the dollar to gold on August 15, 1971, thereby removing any limit on the government’s ability to finance itself by debasing the currency and stealthily confiscating the wealth of savers through inflation.
In the years preceding this announcement, the US government financed its out of control spending, stemming from the Vietnam War and new welfare programs, by printing more dollars than it had gold backing for.
Nixon claimed he was removing the last links of the gold standard, because it was "in everybody’s best interest" and that he was protecting us from foreigners, i.e. "international speculators." He also claimed that he was taking further action to "increase jobs for Americans." See the 2 minute sales pitch below.