www.JoeCobb.com

I think that human beings, when we are asked the question, “Do you agree?” - we will tell you, most of the time ‘Yes’ or ‘No’ based on what we do believe. If your question is really absurd, I would tell you, “No, I do not agree.” I am not loyal just to fellowship or followership; I’m not a “team player” on some intellectual team. A “team” must always be expected to think alike, as in a “pep rally” with cheerleaders. Nobody thinks independently on a team. That is the “party line” or “politically correct” system.

But I think for myself. I hope you do too.

When it comes to ideas, we are not a “team” who follow “consensus” of opinions. We like to look at the evidence and to question the Conventional Wisdom. If we were professional researchers, that would be called “the scientific method.”

I hope in my Congressional Campaign in 2008 (Arizona- 4th District) some new issues will be introduced into the discussion, and I will push for a few particular ideas.

I like to say, “Stand Up for Human Rights.” That is the tag line on my business card.

I would appreciate your vote on September 2, 2008, in the Libertarian primary (if you are registered as LBT). On November 4, 2008, I will face off against Ed Pastor and Don Karg, who have done this contest a few times. I used to work for Congress, so I really do know what this job is all about. Look at my Experience and work history.

New York Times Book Review, published March 7, 2008
by William Grimes

Review of Gusher of Lies; the dangerous delusions of “energy independence” by Robert Bryce

After motherhood and apple pie, energy independence probably qualifies as the most popular political slogan in the land. It is, as they say, a no-brainer. Robert Bryce agrees: You have to have no brain to think it is possible or even desirable.

In “Gusher of Lies,” Mr. Bryce, a freelance journalist specializing in energy issues, mounts a savage attack on the concept of energy independence and the most popular technologies currently being promoted to achieve it. Ethanol? A scam. Wind power? Sheer fantasy. Solar power? Think again. For the foreseeable future, which is to say the next 30 to 50 years, fossil fuels will reign supreme, as they have for the last century. Deal with it.

With all the gusto of a hunter clubbing baby seals, Mr. Bryce goes after one cherished green belief after another, but he is an equal-opportunity smiter. Having kicked the props from under every green technology in sight, he goes after the political right.

The current administration and its neoconservative allies, he argues, have made energy independence part of the war on terror, a moral and tactical blunder. “Energy independence, at its root, means protectionism and isolationism, both of which are in direct opposition to America’s long-term interests in the Persian Gulf and globally,” he writes.

Mr. Bryce begins coolly, then heats up and eventually approaches core meltdown. In a perspective-setting opening chapter, he reviews the history and current state of energy needs in the United States, whose situation is not nearly as desperate, he argues, as one might think. Yes, the United States depends on foreign oil and natural gas, as it has for many decades, but only 11 percent of its oil came from the Persian Gulf in 2005. It imports 80 percent of its semiconductors and 100 percent of strategic minerals like bauxite and manganese.

Oil, Mr. Bryce argues, is simply a commodity. It also costs about the same, in real terms, as it always has. Oil producers need to sell just as badly as customers need to buy. It is undoubtedly true, as President Bush declared, that “America is addicted to oil.” To which Mr. Bryce answers, So what? Besides, he writes, “America’s appetite is simply too large and the global market is too sophisticated and too integrated for the U.S. to secede.”

After clearing the ground, Mr. Bryce gets to work demolishing cherished green beliefs about alternative energy sources. Ethanol, in particular, drives him wild. Fuel derived from corn has channeled billions in subsidies to Midwestern farmers and agribusiness, he writes, despite glaring shortcomings. It is expensive to produce and requires enormous amounts of water when irrigation comes into play. It produces much less energy than gasoline while emitting more pollutants into the air.

Detroit loves ethanol because it can use it to inflate fuel-efficiency ratings on their cars artificially. The mammoth Chevy Suburban, produced as a flex-fuel vehicle capable of burning both ethanol and gasoline, magically boosted its fuel efficiency to 29 miles per gallon from 15, since under federal rules only a vehicle’s gasoline consumption need be factored into the equation. Ethanol, in other words, has allowed American car manufacturers to produce more gas guzzlers and contribute to increased imports of foreign oil.

The problem with corn and other alternative fuel sources boils down to cost and output. Fuel made from switch grass, another potential solution to the energy problem, costs a lot to produce, delivers a lot less energy than petroleum and would require, like corn, vast areas of farmland to meet a meaningful percentage of current energy needs.

Wind power and solar power have the added drawback of being intermittent and unpredictable. A town that relied entirely on solar or wind power would suffer constant service interruptions and wild fluctuations in output, which is why both technologies must be used in conjunction with traditional fossil-fuel generators.

Mr. Bryce lands one telling blow after another, but he favors a slashing, ad-hominem style of attack that can undercut his credibility, especially when he moves away from economics and technology and ventures into politics, an arena to which he brings no particular expertise. He employs a peculiar, almost actuarial assessment of the risk posed by terrorism, which he compares to random events like lightning strikes. This completely misses the point about the threat posed by radical Islam. Using the word “neocon” seems to be enough, for him, to discredit an argument or an opponent.

Fortunately, the book steers back to the high road at the end, when Mr. Bryce suggests that there is some light at the end of the tunnel, some of it solar-powered. Within modest limits, he argues, solar power can play a bigger role in meeting energy needs, especially with new technology that transforms infrared light into electricity. Algae look promising as a source of biodiesel. The major environmental groups may even, eventually, see the point of nuclear power, “the only sector that has enough momentum and enough capital behind it to make a significant dent in the overall use of fossil fuels.”

Mr. Bryce’s pet idea, though, is something that does not exist, a superbattery capable of storing large quantities of electricity. As the magic wand to bring this “silver bullet” into existence Mr. Bryce proposes a Superbattery Prize awarded either by the Energy Department or private foundations: $1 billion, say, for a compact, affordable system that can store multiple kilowatt-hours, and $10 billion for a system that can store megawatt-hours. The hard-nosed Mr. Bryce reveals himself in the end as something of a visionary and perhaps even a revolutionary. Power to the people.

Read this book:
Gusher of Lies
The Dangerous Delusions of “Energy Independence”
By Robert Bryce
Illustrated. 371 pages. PublicAffairs. $26.95.

The Supreme Court decision in District of Columbia v. Heller, striking down the ban on gun ownership in the nation’s capital, is welcome because it affirms the natural right of self defense and an explicit constitutional right of individuals to own firearms. It strikes a blow against “wishful thinking as public policy.”

Consider this quote from the CNN news report on the Supreme Court decision:

In March, two women went before the justices with starkly different opinions on the handgun ban.

Shelly Parker told the court she is a single woman who has been threatened by drug dealers in her Washington neighborhood.

“In the event that someone does get in my home, I would have no defense, except maybe throw my paper towels at them,” she said, explaining she told police she had an alarm, bars on her windows and a dog.

“What more am I supposed to do?” Parker recalled asking authorities. “The police turned to me and said, ‘Get a gun.’ ”

Elilta “Lily” Habtu, however, told the high court that she supports the handgun ban, and tighter gun control in general. Habtu was in a Virginia Tech classroom in April 2007 when fellow student Seung-Hui Cho burst in and began shooting. She survived bullets to the head and arm.

“There has to be tighter gun control; we can’t let another Virginia Tech to happen,” she told the court. “And we’re just not doing it; we’re sitting around; we’re doing nothing. We let the opportunity arise for more massacres.”

The police replied to Shelly Parker with cold realism, candidly admitting they were not prepared to do anything to protect her. Indeed, the U.S. Supreme Court had ruled in Castle Rock v. Gonzales (2005) that there is no constitutional obligation for the police to protect you.

Yet, look at the quotation from Elilta “Lily” Habru. This unfortunate woman has experienced the horrible effects of violence committed by a criminal with a gun. The criminal, Seung-Hui Cho, was already violating a “gun-free zone” law against bringing his gun onto the Virginia Tech campus. She blames lax law enforcement for her suffering and wants “tighter gun control.”

What exactly does she want? She has a lovely dream: a world without guns or violence. Washington, DC, is famous as the “murder capital” of the country. Guns are everywhere, and yet that city had the strictest gun control laws in the nation. If there had been any more strict enforcement, it would have required some kind of periodic house to house search of the city, as well as TSA-airport security searching of individuals as they walk down the streets.

That is where Elilta Habru’s wishful thinking would lead. We should all have a dream about a world without violence, but a world without individuals owning - and carrying, loaded - firearms is not likely to bring us that peaceful situation. Wishful thinking cannot make guns and violent criminals go away, but wishful thinking can bring us an authoritarian police state.

by Jonathan Rauch
Reprinted from The Wall Street Journal
June 21, 2008; Page A9

By order of its state Supreme Court, California began legally marrying same-sex couples this week. The first to be wed in San Francisco were Del Martin and Phyllis Lyon, pioneering gay-rights activists who have been a couple for more than 50 years.

More ceremonies will follow, at least until November, when gay marriage will go before California’s voters. They should choose to keep it. To understand why, imagine your life without marriage. Meaning, not merely your life if you didn’t happen to get married. What I am asking you to imagine is life without even the possibility of marriage.

Re-enter your childhood, but imagine your first crush, first kiss, first date and first sexual encounter, all bereft of any hope of marriage as a destination for your feelings. Re-enter your first serious relationship, but think about it knowing that marrying the person is out of the question.

Imagine that in the law’s eyes you and your soul mate will never be more than acquaintances. And now add even more strangeness. Imagine coming of age into a whole community, a whole culture, without marriage and the bonds of mutuality and kinship that go with it.

What is this weird world like? It has more sex and less commitment than a world with marriage. It is a world of fragile families living on the shadowy outskirts of the law; a world marked by heightened fear of loneliness or abandonment in crisis or old age; a world in some respects not even civilized, because marriage is the foundation of civilization.

This was the world I grew up in. The AIDS quilt is its monument.

Few heterosexuals can imagine living in such an upside-down world, where love separates you from marriage instead of connecting you with it. Many don’t bother to try. Instead, they say same-sex couples can get the equivalent of a marriage by going to a lawyer and drawing up paperwork – as if heterosexual couples would settle for anything of the sort.

Even a moment’s reflection shows the fatuousness of “Let them eat contracts.” No private transaction excuses you from testifying in court against your partner, or entitles you to Social Security survivor benefits, or authorizes joint tax filing, or secures U.S. residency for your partner if he or she is a foreigner. I could go on and on.

Marriage, remember, is not just a contract between two people. It is a contract that two people make, as a couple, with their community – which is why there is always a witness. Two people can’t go into a room by themselves and come out legally married. The partners agree to take care of each other so the community doesn’t have to. In exchange, the community deems them a family, binding them to each other and to society with a host of legal and social ties.

This is a fantastically fruitful bargain. Marriage makes you, on average, healthier, happier and wealthier. If you are a couple raising kids, marrying is likely to make them healthier, happier and wealthier, too. Marriage is our first and best line of defense against financial, medical and emotional meltdown. It provides domesticity and a safe harbor for sex. It stabilizes communities by formalizing responsibilities and creating kin networks. And its absence can be calamitous, whether in inner cities or gay ghettos.

In 2008, denying gay Americans the opportunity to marry is not only inhumane, it is unsustainable. History has turned a corner: Gay couples – including gay parents – live openly and for the most part comfortably in mainstream life. This will not change, ever.

Because parents want happy children, communities want responsible neighbors, employers want productive workers, and governments want smaller welfare caseloads, society has a powerful interest in recognizing and supporting same-sex couples. It will either fold them into marriage or create alternatives to marriage, such as publicly recognized and subsidized cohabitation. Conservatives often say same-sex marriage should be prohibited because it does not exemplify the ideal form of family. They should consider how much less ideal an example gay couples will set by building families and raising children out of wedlock.

Nowadays, even opponents of same-sex marriage generally concede it would be good for gay people. What they worry about are the possible secondary effects it could have as it ramifies through law and society. What if gay marriage becomes a vehicle for polygamists who want to marry multiple partners, egalitarians who want to radically rewrite family law, or secularists who want to suppress religious objections to homosexuality?

Space doesn’t permit me to treat those and other objections in detail, beyond noting that same-sex marriage no more leads logically to polygamy than giving women one vote leads to giving men two; that gay marriage requires only few and modest changes to existing family law; and that the Constitution provides robust protections for religious freedom.

I’ll also note, in passing, that these arguments conscript homosexuals into marriagelessness in order to stop heterosexuals from making bad decisions, a deal to which we gay folks say, “Thanks, but no thanks.” We wonder how many heterosexuals would give up their own marriage, or for that matter their own divorce, to discourage other people from making poor policy choices. Any volunteers?

Honest advocacy requires acknowledging that same-sex marriage is a significant social change and, as such, is not risk-free. I believe the risks are modest, manageable, and likely to be outweighed by the benefits. Still, it’s wise to guard against unintended consequences by trying gay marriage in one or two states and seeing what happens, which is exactly what the country is doing.

By the same token, however, honest opposition requires acknowledging that there are risks and unforeseen consequences on both sides of the equation. Some of the unforeseen consequences of allowing same-sex marriage will be good, not bad. And barring gay marriage is risky in its own right.

America needs more marriages, not fewer, and the best way to encourage marriage is to encourage marriage, which is what society does by bringing gay couples inside the tent. A good way to discourage marriage, on the other hand, is to tarnish it as discriminatory in the minds of millions of young Americans. Conservatives who object to redefining marriage risk redefining it themselves, as a civil-rights violation.

There are two ways to see the legal marriage of Del Martin and Phyllis Lyon. One is as the start of something radical: an experiment that jeopardizes millennia of accumulated social patrimony. The other is as the end of something radical: an experiment in which gay people were told that they could have all the sex and love they could find, but they could not even think about marriage. If I take the second view, it is on conservative – in fact, traditional – grounds that gay souls and straight society are healthiest when sex, love and marriage all walk in step.

Mr. Rauch, a senior writer with National Journal and a guest scholar at the Brookings Institution, is the author of “Gay Marriage: Why It Is Good for Gays, Good for Straights, and Good for America” (Holt Paperbacks, 2004).

I have just finished reading a great new book, “Let Them In: The Case for Open Borders,” by Jason L. Riley. I want to make the message of that book the centerpiece of my campaign for Congress in 2008. You should buy and read this book: “Let Them In: The Case for Open Borders,” by Jason L. Riley. Penguin/Gotham Books, $22.50

[Click here to see an interview with Jason L. Riley,
about the ideas in this new book.]

Editorial, Los Angeles Times, June 17, 2008

Same-sex unions do not diminish the bonds of marriage, they uphold them.

Across California today, in mass public weddings and in small, private services, gay and lesbian couples will exchange official vows of undying love and wedlock. With the sanction of the state Supreme Court, these couples stand together as full citizens at last.

Their long odyssey to reach this day serves to remind us why people marry at all, especially in an era of casual relationships. As any married person can attest, marriage is significant precisely because it is difficult. True, it confers certain public protections, but even more, it requires personal sacrifices. If mutual affection and appreciation were enough to sustain relationships across the years, there would be no need for solemn vows of fidelity. Those vows protect many a marriage through many a rough patch; when two people agree to enter into such a union, it by rights should carry the name and honor of marriage, whether it’s between people of opposite sex or between a man and a man, or a woman and a woman.

Opponents of same-sex marriage often deplore this expansion of the meaning of marriage because they view it as threatening to traditional unions. As they use this day as a rallying point for a proposed amendment to the state Constitution to ban such marriages, it’s time to ask them directly: How does marriage of one type threaten others? Why do many heterosexuals feel that the beauty of their own marriage vows is in no way changed by today’s weddings, while others feel theirs have somehow been diminished?

Perhaps the next few months will ease these fears, as same-sex couples begin their married lives together. Those couples will settle into communities without disorder or threat; they will bring legal protection to their bonds of love. Those bonds can only be good for society - children gain from being raised by married parents, and communities are stronger when residents are legally committed to one another. As more and more Californians marry, society will grow stronger, not weaker.

That’s no doubt why opponents sought a stay of the court’s ruling until after the election. They know that as same-sex marriages become commonplace, the fears about them will fade, and eventually we will wonder what all the fuss was about. In the meantime, opponents will resort to hyperbole and fear. Take this missive last week from the Alliance for Marriage, issued in response to the announcement that the state of New York would recognize the unions performed in California:

“The governor of New York state will declare hundreds of years of marriage law in New York to be null and void. … The governor of New York state will force California-style ‘gay marriage’ on all the families and children of his own state.”

It’s a fairly reliable indicator of a bad argument when its proponent is forced to overstate the case in order to make it. The above surely qualifies. Same-sex couples are not upending the institution of marriage; nor are their supporters. Rather, they are engaged in a profoundly conservative act: They ask not to abolish marriage but to uphold it.

Some religious organizations won’t perform these marriages or recognize these unions -that’s their constitutional right. But the government, which has obligations of equity, may not engage in the discrimination that religions are allowed. As long as it bestows the privileges of marriage on some couples, it must bestow them on all.

In California, the initiative process allows voters to amend the state Constitutiondirectly, and unfortunately, a measure on the November ballot will give them the chance. The question won’t be whether same-sex marriage is right or wrong -that’s a matter of personal conviction -but whether those who believe it is wrong should have the power to deny marriage to those who seek its protections.

Put another way: Many Californians undoubtedly object to unwed couples who have and raise children together, but no constitutional amendment prevents that, whatever themoral calculus.

To those who insist that an unevolving morality undergirds our state and federal constitutions, we remind them that not so long ago, many Americans believed with passionate conviction that it was a sin, a threat to families and a violation of the law for people of different races to marry.

The 1959 ruling of a Virginia state court judge to deny this right to a black woman and a white man aptly summarized the fervor with which opponents of miscegenation drew on tradition and religion to support their views:

“Almighty God created the races white, black, yellow, malay and red, and he placed them on separate continents,” trial judge Leon Bazile wrote. “And but for the interference with his arrangement there would be no cause for such marriages. The fact that he separated the races shows that he did not intend for the races to mix.”

The U.S. Supreme Court struck down that ruling in 1967; on that happy day, 16 states were forced to abandon their laws banning interracial marriage. Today, interracial couples go about their lives without legal threat; some no doubt still feel the sting of disapproval. But those who would look askance on those lawfully wedded couples do so without the state to reinforce their bigotry. Our courts, certainly our supreme courts, exist not to assess God’s will but to enforce the precepts of our constitutions, including the insistencethat all Americans — black or white, male or female, straight or gay -are entitled to equal protection and the due process of our laws.

The California Supreme Court affirmed that principle last month and delivered the eloquent basis for today’s ceremonies. As the state’s voters watch the celebrations in the coming months, they should enjoy the sight of fellow citizens availing themselves of a public institution, that of marriage. These celebrations allow us to share in the newlyweds’ happiness, to join in acknowledging a milestone of joy and lifelong commitment. And they prompt at least one more question for those who disapprove: How can the state’s blessing on these acts of love in any way diminish us?

Published in the Los Angeles Times, June 17, 2008.

by Robert P. Murphy

As the U.S. Senate debates climate change legislation this week [June 4-6, 2008], many have proclaimed the virtue of its “cap and trade” system as a “market solution” to reducing carbon emissions. Nothing could be further from the truth.

Unlike a direct tax, cap and trade is a European-style scheme that masks its negative consequences on the economy behind the rhetorical benefits of new government programs designed to help us. In truth, neither is good for consumers or the economy, but a closer look reveals why so many politicians find comfort in cap and trade.

The economic argument for penalizing carbon emissions is straightforward. If emissions from human activities are contributing to dangerous temperature increases as some scientists claim, then textbook theory says that the government should take steps to increase the private costs to those emitting carbon. Markets are efficient only when firms take all costs of their behavior into account.

If one agrees so far, the next question is which mechanism should be used to raise the pain of carbon emissions? One approach would have the government levy an outright tax. This is favored by most economists, and a Congressional Budget Office (CBO) analysis in February recommended a carbon tax because of its efficiency in meeting climate change targets. But politicians shy away from the dreaded T-word, especially with the economy entering recession and energy prices hitting all-time highs.

Enter cap and trade, which gives only the illusion of reducing carbon emissions without imposing costs on the average citizen. In this approach, the government distributes permits that entitle the holder to emit a specific quantity of carbon dioxide. The trick is that these permits would be tradable in the market, just as surely as shares to IBM or contracts on copper futures.

This, unfortunately, is why some have mistakenly viewed a cap and trade program as a “market solution.” Because the carbon permits are turned into property with a market price, they should end up in the hands of those who value them the most, i.e., the most efficient emitters. In theory this means that a cap and trade system achieves a desired reduction in carbon emissions at the lowest possible compliance cost.

For example, if the government arbitrarily decreed that every firm had to reduce its carbon emissions by 10 percent, this would cause unnecessary economic damage, because it is much easier for some operations to scale back emissions than others. If instead the government issued tradable permits allowing total emissions of 90 percent of the previous year’s amount, then the desired reduction would be much cheaper. Those firms that could scale back more easily would do so, and would sell their permits to those firms that found it too expensive to cut emissions. It is the elegance of this outcome that has hoodwinked market enthusiasts into supporting cap and trade.

Yet despite the superficial resemblance, cap and trade isn’t really a free market. The number of permits is an arbitrary scarcity imposed by government fiat. In the real market, resource prices indicate genuine scarcity. If an oil pipeline is attacked, the price of oil goes up, causing industry and consumers to economize on the commodity. This response is rational, because the available supply truly has gone down.

But if the prices of oil, coal, and other fossil fuels explode because of a cap and trade program, this won’t reflect genuine economic scarcity. Consumers will be forced to restrict their use not because there is less supply available, but because of a number dreamed up by Washington bureaucrats. This is no more a “market price” than if the government decided to sell people permits giving them permission to sneeze. (This actually makes sense, since exhaling emits CO2.)

Cap and trade is not a market-based solution. It relies on a political scheme to increase costs, and can therefore be justly viewed as a tax, stealthy or otherwise, on energy - the lifeblood of our economy. So here’s the real difference: cap and trade masks the causes of higher consumer prices much better than a straightforward tax. And that is precisely why so many politicians endorse it.

Robert P. Murphy is an economist with the Institute for Energy Research where this article was first published. He received his Ph.D. in economics from NYU. He has written and lectured extensively on the benefits of market-oriented policies.

by Amity Shales
Reprinted from The Wall Street Journal
June 5, 2008; Page A21

People these days fear inflation. We also fear changing rates of inflation. And most of the tools we might use to protect ourselves, such as the Treasury Inflation-Protected Securities bond or gold stocks, are imperfect. TIPS are, after all, based on an inflation-measure whose accuracy is itself controversial – the Consumer Price Index.

So it’s worth remembering that, 75 years ago today, President Franklin D. Roosevelt destroyed an inflation hedge that was literally as good as gold: the so-called “gold clause.” This helped prolong the Depression and has been causing damage ever since.

Consider an investor in the gold standard era. An ounce of gold was worth $20.67 and you could, at least in theory, trade your greenbacks for gold at the bank. The gold standard checked a government’s willingness to inflate, since it started losing gold when it did so. Those who traded bonds knew a confidence we can never know.

Washington, like all governments, could occasionally cheat on the gold standard – suspend it, limit the ability of citizens to convert paper into gold, and so on. But investors could protect themselves by writing a gold clause into their contracts. Such a clause promised a borrower that he could be repaid “in gold coin of the United States of America of or equal to the present standard of weight and fineness.” The gold clause fostered economic growth in the late 19th and early 20th centuries by making it easier for young industries to raise capital. Since investors protected by these clauses knew they would get their money back, interest rates were lower. To finance World War I, Washington even inserted gold clauses into Liberty Loans.

The powerful deflation of the early 1930s gave Roosevelt the excuse to end the gold standard. Dirt-low commodity prices, starving farmers, bank seizures of homes, 20% unemployment: All these miseries shouted, “looser money now!” The agricultural community, including eccentric Agriculture Secretary Henry Wallace, viewed the end of the gold standard as the ultimate revenge of the farmers punishing Wall Street for its 1920s prosperity.

One night in April, 1933, FDR surprised a bunch of advisers, saying “Congratulate me.” He’d taken the country off the gold standard, and now planned to personally manage the dollar’s exchange rate and price levels. Hearing the news, colleagues “began to scold Mr. Roosevelt as though he were a perverse and particularly backward schoolboy,” recalled Ray Moley. Secretary of State Cordell Hull, the great free trader, “looked as though he had been stabbed in the back. FDR took out a ten-dollar bill, examined it and said ‘Ha! . . . How do I know it’s any good? Only the fact that I think it is makes it so.’”

Congress then drafted a joint resolution declaring gold clauses – protection against any damage Roosevelt might do – to be “against public policy.” Roosevelt couldn’t wait to see the resolution become law. Henry Wallace wrote that Roosevelt “looked up at the clock and put down 4:40 p.m., June 5, 1933 and signed his name.”

Randall Kroszner, a governor at the Federal Reserve Board, has studied this period and has noted that the price went up on most stocks and bonds, even gold-clause bonds, when the Supreme Court eventually validated FDR’s action. Mr. Kroszner and others argue that the abrogation of the gold clause had some virtue because it reduced the cost and inconvenience of debt renegotiation in a period of credit crisis.

But you can also argue that those price movements were more an expression of relief that a futile battle was over rather than a vote of approval. In my own review of the period I found evidence that snatching away from investors the perfect inflation hedge hurt the economy.

The market rally in the spring of 1933 slowed as investors watched FDR fiddle with the dollar and commodities over the course of the fall. In 1934, FDR thought better of it all and fixed the dollar to gold again, albeit now at $35 dollars an ounce. But the abrogation of the gold clause suggested that Washington had no regard for property rights. The general uncertainty generated by government economic policies did not abate. Capital went on strike. The Great Depression endured to the end of the decade. The positive transparency that the Securities and Exchange Commission or the creation of deposit insurance brought to markets was offset by losses like that of the gold clause.

And from then on, the federal government enjoyed wider license to inflate. Without the gold-clause option, citizens tried out other hedges – today a line about the CPI may stand where the old gold line once stood. In the 1970s, Sen. Jesse Helms pushed for repeal of the old abrogation, and eventually, with the support of Treasury Secretary William Simon, he won. But the average investor never used the clause to the same extent.

Today, as in the last days of the gold clause, officials like Mr. Kroszner of the Fed’s Board of Governors are weighing a difficult choice between efficient crisis management and property rights. People don’t talk more about the damage of monetary uncertainty because that damage is so spread out – harder to discern than, say, a single giant event like the implosion of Bear Stearns. But the old gold clause footnote explains why we may see yet more angst over the Consumer Price Index, the TIPS bond, or even LIBOR, the London Interbank rate. We have lost our bearings and our confidence in money generally.

After a majority of the Supreme Court upheld the constitutionality of the gold clause abrogation, Justice James McReynolds read the dissent. Today McReynolds is generally regarded as an irrelevant reactionary, a footnote himself. But his rueful words ring true for those trying to reckon the dollar’s future. It was, he said, “impossible to estimate the result of what has been done.”

Miss Shlaes is a senior fellow in economic history at the Council on Foreign Relations and author of “The Forgotten Man: A New History of the Great Depression,” out in paperback this week (Harper Perennial).