Did you guess Ron Paul?
How about Ludvig von Mises? Or, what about Murray Rothbard? Milton
Did you think of Alan Greenspan? You got it.
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
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
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.