Saturday, November 23, 2013

JFK and Federal Budgetary Policy under the Authority of Gold

NEP yesterday, on the day that marked the 50th year since he died in a lawless act, had a nice excerpt from a commencement address at Yale by JFK from 1962.

Posted without commentary, it seems to be an excerpt that picked out some nice observations about fiscal policy by JFK.  Here is a copy of the full address at a UVa website.

I'd like to point out further context of the fiscal issues that JFK was talking about in light of the fact that in 1962 we were still a retrograde nation, populated by retrograde humans, both under the authority of the metal gold (Column 11, Number 79) the presence of which was still required in order to extinguish the external liabilities of our nation and this produced REAL effects for the nation not just financial effects.

Through the words of JFK here, we can see that the REAL loss of possession of mass measures of this metal by our nation was a major concern that influenced decisions by the policymakers of that time in our history.

The word "gold" appears 6 times in this speech.

Here are all 6 in local context:

Calhoun in 1804 and Taft in 1878 graduated into a world very different from ours today. They and their contemporaries spent entire careers stretching over 40 years in grappling with a few dramatic issues on which the Nation was sharply and emotionally divided, issues that occupied the attention of a generation at a time: the national bank, the disposal of the public lands, nullification or union, freedom or slavery, gold or silver.  [Ed: interesting here sees subjection to the metals as separate to human slavery... blind...] Today these old sweeping issues very largely have disappeared.
A well-known business journal this morning, as I journeyed to New Haven, raised the prospects that a further budget deficit would bring inflation and encourage the flow of gold. [Ed: this was a "bad" thing back then...]  We have had several budget deficits beginning with a $12 1/2 billion deficit in 1958, and it is true that in the fall of 1960 we had a gold dollar loss running at $5 billion annually.  [Ed: "gold dollar loss"... interesting.] This would seem to prove the case that a deficit produces inflation and that we lose gold, [Ed: a concern NOT present today thank God.] there was no inflation following the deficit of 1958 nor has there been inflation since then.
Our wholesale price index since 1958 has remained completely level in spite of several deficits, because the loss of gold has been due to other reasons: price instability, relative interest rates, relative export-import balances, national security expenditures—all the rest.
Let me give you a third and final example. At the World Bank meeting in September, a number of American bankers attending predicted to their European colleagues that because of the fiscal 1962 budget deficit, there would be a strong inflationary pressure on the dollar and a loss of gold. Their predictions of inflation were shared by many in business and helped push the market up. The recent reality of non-inflation helped bring it down. We have had no inflation because we have had other factors in our economy that have contributed to price stability.
So we can see that the fiscal issues back then could not be discussed without demonstrating a serious concern for what REAL effects such policies may have had on our nations ability to retain mass measures of the metallic element gold.

This REAL concern is gone from the scene today, the nation has gained back its absolute fiscal authority, ours is no longer a retrograde nation; but unfortunately our policymakers remain retrograde humans.


mike norman said...

I posted this speech over three years ago right here on this blog. Kennedy Yale commencement.

Roger Erickson said...

Be sure to repeat it again in another 50 years, Mike. I expect it'll still be necessary.

Is there an MMT retirement community on some island yet? :)

Einstein wanted one for reasonable people. Maybe we can partner with some physics associations. :(