Tuesday, January 8, 2013

Two Former Mint Directors are disagreed over TPC

Monetary Realism
Former Head of U.S. Mint: beowulf and JKH are 100% correct
Michael Sankowski

Former U.S. Mint Director: The $1 Trillion Platinum Coin Ain't Worth a Plugged Nickel
Edmund Moy | 38th director of the United States Mint


Matt Franko said...

Moron Metaphor Alert: The Platinum Coin is a "Plugged Nickel"... right on cue....


Clonal said...

On the whole, Looking at Philip Diehl's background, and and Edward Moy's background, I am more likely to listen to Diehl.

When Diehl returned to Austin from Stanford, he worked for Bullock at the Texas Comptroller of Public Accounts office. Later he held positions as assistant to Commissioner Dennis L. Thomas and Director of Telephone Regulation at the Public Utility Commission of Texas (PUC).

In the wake of the Bell system divestiture, he oversaw a dramatic change in the regulation of telecommunications utilities. He was the PUC's liaison to the Texas Legislature during a rewrite of the state's telecommunications regulatory laws and championed the commission's opposition to AT&T's attempt to be deregulated by the legislature. The proposal was defeated and the legislature mandated a market dominance case be held to determine whether AT&T retained market power.[1] Diehl led the case against AT&T's deregulation which prevailed at the administrative trial level. The decision was unanimously confirmed by the commission and upheld on appeal in state district court.

Diehl was responsible for adoption of the state's first programs to make telephone service more affordable for low income households: Lifeline rates and Link Up Texas. He also spearheaded creation of Texas Relay Service, the state's first program to make telecom service available to the deaf and hard-of-hearing. In 1988, Diehl joined Dallas-based International Telecharge, Inc. as Vice President of Regulatory Affair. He was responsible for state regulatory and legislative affairs and was the company's expert witness in administrative law and appeals court proceedings.

In January 1991, Diehl was named legislative director to U.S. Senator Lloyd Bentsen. In September 1992, the Senator promoted him to majority staff director of the Senate Finance Committee.[2] On the first day of the Clinton administration, he moved to the U.S. Treasury Department and was named Chief of Staff to Treasury Secretary Bentsen.[3] In December 1993, President Clinton announced his intent to nominate Diehl as Director of the United States Mint, and the U.S. Senate confirmed him unanimously in June 1994.[4]
Director of the United States Mint and thereafter

Diehl executed a dramatic turnaround of the Mint. By the time he left the agency in March 2000, the Mint had convinced Congress to exempt it from all procurement regulations and annual appropriations,[5][6] eliminated nine of ten political patronage positions,[6] and resolved its long-standing financial management weaknesses.[7][8] The Mint also reformed its troubled commemorative coin program[6] and built one of the most successful e-Business sites on the web.[6][9]

Adam1 said...

"The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time."

While he may have a point with bullion coins, proof coins are also covered and while not INTENDED for circulation they are perfectly legal tender (and I have owned some that have made it into circulation).

Matt Franko said...

Moy is from Waukesha that IIRC is where Paul Ryan is from too... rsp,

Roger Erickson said...

Diehl quotes legal precedent, Moy only his personal opinion.

Clonal said...

The difference between bullion coins and regular coins is that "Bullion coins can be sold for the value of the metal or the face value, whichever is higher" - however, it is illegal to sell "non-bullion" coins for their metal content - Bullion coins are still legal tender - but only at "face value"

Also Diehl's arguments have swung over Kos to the platinum coin side - a big break to convince many career progressives.

Ramanan said...

It has some logic to it. The coin has to be circulating ideally.
The State also has to regulate the amount of issuance. For normal circulating coins, there exist such laws.

However the present law seems to allow it without it being in circulation. Can't say that for sure.


That article was not written by Carney but someone else but on his site.

TheArmoTrader said...

Roger hits the nail on the head.
"Diehl quotes legal precedant while Moy his own opinion"

I tweeted Carney over twitter about this. Moy makes no legit case against it.

paul said...

Roger hits the nail on the head.
"Diehl quotes legal precedant while Moy his own opinion"

Roger both hits the nail on the head and uses his own head rather someone else's thinking, which is good advise for anyone.

There is no one alive that could undermine my confidence in the laws of arithmetic. I suspect Matt, Roger, Mike and many others here feel the same way.

Mike Norman said...

Even still, Carney had to approve it. He runs that site and he's been trashing the idea ever since it went mainstream. He works at CNBC, remember?

Tom Hickey said...

Thanks, Ramanan. Fixed.

geerussell said...

When you get to the core of Moy's argument, it's the same old same old:

Let's assume that a $1 trillion circulating coin could be created. It would be no different than creating money out of thin air.

By the way, a trillion dollars ain't what it used to be. One coin would not even cover one year's deficit. Why not mint 17 coins to eliminate the national debt? Using such trickery, especially at that scale, would have serious negative consequences on America's leadership of the world economy and confidence in our dollar.

And by comparison, we would succeed in doing the impossible: making Greece look virtuous and sacrificial.

Blah blah OMG t3h fiat from thin air blah blah scary large numbers blah blah Greece.


paul said...

"Let's assume that a $1 trillion circulating coin could be created. It would be no different than creating money out of thin air."

I don't believe it can be created any other way can it?

Tom Hickey said...

Obvious moron.

Dan Kervick said...

Moy admits that the law doesn't specify whether the proof coin is supposed to be a bullion coin or a circulating coin. But the author of the law said that the point of the law was to help the US reap seigniorage. So clearly the law contemplates that the face value would be much more than the metal value.

Then he throws up his hands about making money from thin air. Does he also think the Fed is wrong to "pass" off $100 bills as being worth more than the ingredients of the bills.