By Nancy Thorner -
One-hundred-twenty fellow lovers of liberty signed up to attend an evening with Steve Forbes and Elizabeth Ames at the historic Union League Club in Chicago on Wednesday, August 13, for a special edition of The Heartland Institute's Author Series to hear Forbes and Ames discuss their new book, "Money: How the Destruction of the Dollar Threatens the Global Economy, and What We Can Do About It.”
Steve Forbes is coauthor of the New York Times bestseller "Power Ambition Glory" and the Wall Street Journal bestseller "How Capitalism Will Save Us." He is also Chairman and Editor-in-Chief of Forbes Media. In 1998 Steve Forbes was a Republican candidate for president.
Elizabeth Ames is a communications executive, and has written two previous books with Steve Forbes, "How Capitalism Will Save Us" and "Freedom Manifesto."
What prompted the Forbes/Ames book collaboration?
The intent of the authors is to covey that money is a simple, basic subject that all can understand. Much education is needed on the subject, which becomes apparent when individuals respond in many different ways when questioned about money. Even among intelligent, self-confident and very capable people, the subject of money is often beyond their comprehension. Steve Forbes and Elizabeth Ames are counting on those who take the time to read their book to become better versed about money than most people are today in the highest government positions.
Introduction of Ames and Forbes
Joe Bast, president and CEO of The Heartland Institute (visit Heartland's Web site), described the purpose of Heartland for those in attendance who were unfamiliar with the Chicago-based free market think tank "as a 29-year-old Chicago based think tank promoting public policy based on individual liberty, limited government, and free markets." In remarks prior to introducing Steve Forbes and Elizabeth Ames, Mr. Bast spoke of four public policy areas of utmost importance which pose immediate challenges to this nation's prosperity:
1) Out-of-control government spending at the national, state, municipal, and local levels of government, with special emphasis on the City of Chicago;
2) Obamacare, with its extensive regulations and control over the healthcare system;
3) Common Core, a curriculum not created by the states and which does not prepare students for college, but instead represents a politicized curriculum imposed upon the states, sight unseen, via Obama's Race to the Top program, sight unseen, which shamefully teaches a distorted history of this nation. This article by Stanley Kurtz, published July 10, 2014, presents a shocking account of the new history standards under Common Core "New War Over High School U.S. History" .
4) Global Warming, which 10 years ago became of prime interest to The Heartland Institute For as mentioned by Joe Bast, the issue was too important for conservatives and libertarians not to touch just because they were not scientists. Since its involvement with Global Warming, The Heartland Institute has produced many reports that counter the reports put out by the IPCC (Intergovernmental Panel of Climate Change), which show the inaccuracies of climate models used by the IPCC, and further expose contradictions made through observation. With China and India not willing to reduce their CO2 levels, might the U.S. be expected to reduce her CO2 levels by 120% so world standards can be met? An unrealistic goal, indeed, and one that would raise the cost of all purchased goods, destroy this nation's economy, and give the government power of control over everything.
Forbes and Ames in agreement over a stable monetary system and the gold standard
Both Steve Forbes and Elizabeth Ames agree that stable money is the only way to a true recovery and a stable and prosperous economy. In shopping for groceries, noticeable is that the cost of meat, coffee, cocoa and other essentials are reaching record high. For this Forbes and Ames lay blame at the feet of Federal Reserve Chairman, Janet Yellen, for believing that a little inflation is harmless and even a good thing. Ms. Yellen, along with others of the Washington establishment, view price increases as mere background noise against an economy that is on the road to recovery. As Forbes remarked, "The Fed hasn't learned anything." According to Steve Forbes, Yellen seems not to recognize how reckless sending over decades have given way today to this nation's unstable, ever-weakening dollar. Instead of experiencing a recovery that the American people can believe in, the Obama/Bernanke/Yellen Federal Reserve and its unstable dollar policies have resulted in what is a feeble recovery at best, and perhaps the start of hyperinflation brought on by the Fed's historic money printing via quantitative easing. Regarding Janet Yellen's confirmation hearing and her remark that more inflation is needed to stimulate the economy, Steve Forbe's expressed astonishment that not one senator asked Yellen how asking taxpayers to pay $1,000 more or so a year for goods and services through inflated money would stimulate the economy!
An article written by Ralph Banko at the time the U. S. Senate was moving toward the confirmation of Janet Yellen as chair of the Federal Reserve System, reflects on what John Maynard Keynes and Nicolas Copernicus had to say about social order and government when money is debased. Further shared are Lenin's view on the practice of debasing money(of lowering the value of currency.).
The best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.
Another area of expressed agreement by Forbes and Ames is in their belief that a true recovery and a prosperous economy can only be achieved through the gold standard as a measure of value. Why gold? Because gold keeps its value better than anything else. Nevertheless, Forbes recommends against investing more than 5% to 10% in gold and then only for the purpose of serving as monetary policy insurance.
This nation’s monetary system based on fixed exchange rates ended in the 1970s, when under Nixon this county went off the gold standard to today's system of fluctuating "fiat" money. This move has proved disastrous for the U.S. and the global economy.
In the more than four decades since abandoning the gold standard, the U.S. dollar has dramatically declined in value. Furthermore, U.S. economic growth has been below historic standards. According to Forbes the housing meltdown and the turmoil that followed would never have occurred with stable money.
Summary of Elizabeth Ames' remarks
Ms. Ames based her remarks on Chapter 5 of her collaboration with Steve Forbes: Money and Morality: How Debasing Money Debases Society. According to Ames, the malaise created by unstable money afflicts not only the economy but all of society. In addition to being a yardstick of value, money is a vital facilitator of social trust in that it expresses the priorities of a society. When money is unstable it acts as a catalyst for disorder. Monetary debasement to the extreme happened under Hitler when money became almost worthless. Ames attributes the destruction of money as a key reason for the recent rise of political polarization and unrest in this nation.
Ms. Ames compared unstable money to Carbon Dioxide. Both are ordorless and colorless. Weak money helped to create the foreclosure crisis (housing bubble) of 2010 and likewise triggered the depression of 2008. Ames emphasized the importance of trust existing in a monetary system. When money is corrupted unrest develops from a lack of trust between effort put forth and just reward. According to Elizabeth Ames, a loss of trust in the monetary system was a factor in destroying McCain’s 2008 candidacy for president. During the foreclosure crisis a definite shift in attitude was noted by Ames when instead of trying to make good on a debt, it was not considered immoral to simply walk away. With an unstable dollar, there is more of both corruption and crime. While the media is focusing on the social unrest in Ferguson, Missouri, it is folly to ignore the community’s poor economic conditions as a contributing factor. For without an education, a job, and a bleak future, individuals are prone to exploit situations and turn to criminal activities for personal gain.
Summary of Steve Forbes' remarks
It was touch and go whether Steve Forbes would be able to arrive in time to fulfill his speaking engagement, having experienced a delay in his flight to O'Hare. Fortunately for all, Forbes arrived at the Union League Club as Elizabeth Ames was finishing up with her remark.
Needing little introduction, Steve Forbes advanced to the podium and immediately plunged into the topic at hand, that of money, cautioning that if the money issue isn't handled properly in an economy nothing else ultimately matters. The result will be an economy that is undermined. As related by Forbes, wealth is created through conducting transactions with one another. It is money that makes transactions possible and easy to do, in contrast to when bartering was used to acquire goods and services. But money in itself is not wealth. Wealth is created by people engaging in transactions with one another. It is the use of money that enables individuals to figure out what something is worth. Accordingly,money works best when it has a fixed value. If the value of money is not known risk goes up, bringing with it economic chaos. Consider what occurred in the 1970's when people poured money into oil and farmland wrongly believing that increases in price must mean there was a shortage of both which necessitated increasing supply. When the price of oil and farmland crashed, however, prior investments made in farmland and oil went south. Even though oil and farm land have both increased in value during the last decade, how much of the added value is real and how much is inflation?
As to why this nation must get back to pegging our currency to gold standard, Forbes used familiar measurements of time and distance to explain the devastating and disrupting consequences of a constantly declining in value of an inflationary "fiat" monetary system. Currency to work is like having sixty minutes in an hour or 12 inches in a foot. These are fixed value so when you make an exchange, do a trade, or buy and sell, it is known what each party is receiving. Forbes further noted that nothing over thousands of years has kept its value as well as gold. Investors need to know that they are not going to be left with devalued dollars.
Asserted by Forbes is that had Nixon not completely unpegged the dollar from the price of gold in 1971, and had this nation maintained the growth rates that she had experienced for the previous 180 years before the dollar was unpegged -- despite boom times, depressions, and everything else -- the size of the economy today would be 50% larger than it now is
With tongue firmly implanted in cheek, Forbes remarked that if we returned to the gold standard, one-world socialist currency manipulator George Soros “would have to find another line of work.”
When questioned about the future of Bitcoin, Forbes described it as a high tech cry for help in response to the unstable dollar, further remarking that Bitcoin is still in its infancy and has not yet been able to achieve stability so it is trusted.
Past and Present
Steve Forbes and Elizabeth Ames were with Heartland at the Union League Club in November, 2012, to talk about their book collaboration "Freedom Manifesto." Listen to Forbes' talk about the book in this video.
Save the date of Friday, September 12, 2014, to attend The Heartland Institute's 30th Anniversary Benefit Dinner with Michelle Malkin as Keynote Speaker. For more informationvisit Heartland's Web site or call 312/377-4000.