Politics, Paper Money, and the United States Entrepreneurial Culture

We inadvertently stepped into “it” with readers of The 5 this month.

The background: On Inauguration Day 2009, 2 million people converged on Washington, D.C.

“Two million people don’t gather in one place unless things are really good, or really bad,” we observed that day. There is a fine line between the two.

Almost three years later, on Oct. 11, 2011, we stepped in the proverbial crotte when we suggested in the 5 Min. Forecast that the disappointment of “the crowd” that had gathered on the National Mall that day had manifested itself in two ways: the Tea Party on the political right and Occupy Wall Street on the political left, suggesting there are “uncomfortable parallels” between the two movements.

“Absolutely not!” cried a representative sample from the Tea Party. “The Wall Street protesters are the virus. The Tea Party is the antidote. The stark and direct contrast between the two groups could not be more noticeable. We have one group demanding everything for nothing (Wall Street protesters). The other group is demanding the government stop taking, regulating and restricting everything.”

“Maybe you should spend more time finding libertarian values within the movement,” countered another voice, “which I strongly believe is our last hope. Occupy Wall Street (OWS) is bringing the widespread outrage against crony capitalism and bought government into the headlines. Don’t assist in the mainstream media’s attempts to marginalize them.”

The debate broke out a week to the day after I had attended a meeting titled Conference on a Stable Dollar: Why We Need It and How to Achieve It, hosted by the Heritage Foundation in Washington, D.C. One notable attendee I had the good fortune of meeting at the conference was a gentleman by the name of Ralph Benko. Mr. Benko, a Forbes contributor, has been in his capacity as fellow at the Lehrman Institute arguing for a new, improved gold standard for three decades.

“No contortions are needed,” Mr. Benko wrote the day after the conference, suggesting one idea unifies the popular protests, “to cross the bridge between the ‘profiteer-hating’ #OWS and the sober reformers gathered in monetary conclave by the Heritage Foundation. The official website of Occupy Wall Street contains an entire forum dedicated to the gold standard. While by no means unanimous, a theme emerges that elegantly is summarized by one of the activists there: ‘Gold and silver. Been honest money since the dawn of time. The only money that has ever worked….'”

Indeed, in the preface to The Case For Gold, the minority report from the presidential 1982 Gold Commission, Ron Paul provides for common ground between the Tea Party and those who would Occupy Wall Street. “Whenever governments are granted the power to purchase their own debt,” Dr. Paul writes, “they never fail to do so, eventually, destroying the value of the currency. Political money always fails because free people eventually reject it.

“For short periods, individual countries can tell their citizens to use paper, but only at the sacrifice of personal and economic liberty.”

The Case for Gold, Dr. Paul’s “Lost Gold Bible,” was written to demonstrate “as clearly as possible the choice available to us: political (paper) money or commodity (real) money… Making the wrong choice will jeopardize our political freedom and destroy the possibility of restoring a truly productive economy.” Never have those words wrung as true as they do today… whether you’re a curmudgeonly Tea Party conservative or a dirty Occupy “hippie.”

Ironically, the kerfuffle between the two groups arose while we were convening for our Agora Financial Reserve Safety & Survival Summit in Baltimore’s Inner Harbor. We screened our new documentary, Risk! for the audience assembled there. Risk! follows a unique set of entrepreneurs as they wend their way through an increasingly regulated economy fraught with litigation and other onerous hurtles to success. As such, we’ve been ruminating on the role of the entrepreneur as the engine of the economy and sole creator of jobs for well on two years now.

The entrepreneur is the antithesis to the politician and benefits most from economic freedom. The society as a whole prospers as a consequence. (You’ll have to view the film and decide on your own if we got the premise right!)

“We have a melting place of ideas,” Gary Shapiro, CEO of the Consumer Electronics Association, says in an interview we conducted for Risk!

We have the desire, the know-how and the goods. But frankly, we often find ourselves fighting our own government.

What’s changing American society is that we used to be people who did things by ourselves. We were brave. We went out there and we fought for the next generation. We gave more to our government than we expected back. Now it’s shifted. Now there’s a large portion of society, about half of Americans, getting checks from the government. It’s entitlement.

You’re entitled to all these things, and if you don’t succeed, it’s not your fault, it’s the companies’ fault, and you’ll sue them or the government owes you this.

Today, we have a mind-set among a large portion of our population of entitlement, which is very, very different than our parents’ generation and their parents’ generation, where you come here with nothing, it’s a gift to be a citizen here and it’s such an opportunity.

The American dream is not a guarantee that you are going to succeed. It’s just a guarantee of equal opportunity to try to succeed. It’s not a guarantee of equal results.

The popular uprisings of both the “right” and the “left” — as onerous and misleading as those political wedge terms can be — would benefit from a return to a system of honest money in which, to quote Dr. Paul again, “the people are in charge, not the politicians and the bankers.”

“No reason why the Tea Party can’t unite with Wall Street protesters,” writes a third voice from the fracas in The 5, “and really sock it to those nervous suckers who occupy the Hill.

“2012 is already shaping up to be an especially dramatic year.”

Amen. Bring it on.


Addison Wiggin

The Daily Reckoning