Show Me the Hard Money

Today’s oddest news is that the Missouri House of Representatives has passed a bill that would officially recognize gold and silver coins issued by federal mints as legal tender in the Show-Me state. Utah actually enacted similar legislation last year, and similar bills are kicking around legislatures in Idaho, Minnesota, South Carolina and Georgia (you can guess which party controls these bodies).

Earlier this week, Abby Rapoport of TAP, who’s rapidly becoming one of the very best chroniclers of strange and interesting doings in state governments, reported on this phenomenon, an outgrowth (but not a direct project) of the Ron Paul Revolution, with its lurid views of a global economic collapse caused by “fiat money” (a term of abuse not heard that often since the nineteenth century). Her interview with a legislator from my home state is especially illuminating:

“What the Federal Reserve is doing with our monetary policy is catastrophic,” says Georgia state Representative Jason Spencer. “They are killing the very thing that Americans work hard for, and that’s our money,” he says. “If we got back on a true gold standard … it would keep government spending in check.”

Spencer was a secondary sponsor of one of the most extreme bills this legislative cycle, authored by Representative Bobby Franklin. While most bills, like Utah’s, would not compel anyone to use gold and silver coins, Franklin’s measure required state taxes to be paid in the precious metals. That would be tricky, of course, for the many Georgians who don’t have the coins, and the bill included no plan to make them widely available. Franklin died last year with his bill still languishing in committee, and Spencer has decided not to pursue it further. But he’s not giving up. Next session, he plans to introduce Utah-style legislation.

Like other proponents of gold-backed currency, Spencer feels a sense of urgency to protect the wealth of his state’s residents in the event of a Fed collapse. “Fiat currencies, if you study them through history, always end bad,” he says. He points to the demise of the Argentine peso and the Russian ruble and to Zimbabwe’s problems with hyperinflation. “You got old women and children out there panning for gold,” he says. “The United States is not immune to a currency crisis.”

The idea that hyperinflation is the major economic peril facing America at the moment requires a truly special perspective on current events. But throughout history, “hard money” advocates have conflated currency with morality, and more generally, creditors with virtue. That makes latter-day goldbugs nothing more or less than the outer edge of a conservative movement increasingly inclined to define the defense of “haves against have-nots” as the defense of civilization under seige by redistributionist barbarians.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.