Everyone in Washington is talking about affordability. Almost nobody is talking about the cause. In the third of four economics lessons with Jenny Beth Martin, Lawrence W. Reed, president emeritus of the Foundation for Economic Education, builds the case from the ground up: what money is, why it has to stay scarce to work, and what has happened every time a government decided it did not.
Reed starts with the definition most people get wrong. If inflation means rising prices, the clerk who changes the sticker is the culprit. If it means an increase in the quantity of money beyond the demand for it, the question becomes who prints the money, and there is only one answer. Jack Kemp put it in five words: wet streets don't cause rain.
From there the hour runs through the history of money and the governments that cheapened it: the first coins around 650 BC, Rome pulling the silver out of its coinage, the Constitution's gold and silver clause, Roosevelt's 1933 order to turn in your gold by May 1, John Law's five-year ruin of France, Andrew Jackson's veto of the central bank, and the Federal Reserve, created to iron out booms and busts, which in Reed's telling brought on the Great Depression instead. Jenny Beth Martin closes with the fix: a Congress that stops spending, a central bank that stops printing, and leaders with the courage to sit through the hangover.
Part four, on the myths and misconceptions of economics, is next.
Key points:
• Doubling the money supply doubles the claims on wealth, not the wealth
• Define inflation as rising prices and business gets blamed; define it as too much money and Washington does
• Booms and busts come from erratic monetary policy, not from capitalism
• Reed's fix for affordability: balance the budget, cut spending, curtail the Federal Reserve
Watch every lesson in the series at jennybethshow.com. Learn more about Tea Party Patriots Action at teapartypatriots.org. To tell your senators and representative to stop spending, call the Capitol switchboard at 202-224-3121.
00:00 — Cold Open: Affordability, Money and Inflation
00:53 — Part Three of Four: Lawrence Reed Returns
01:35 — What Is Money? The Middleman in Every Trade
03:42 — What Overprinting Does to Everything Else
04:51 — Why Money Must Stay Scarce
06:07 — The Coat Check Ticket
07:49 — Money vs. Barter: The Corn Farmer and the Oats
09:58 — Was Money Invented?
11:08 — Seashells, Wampum, Tobacco, Cattle and Cigarettes
13:04 — Why Gold and Silver Won
14:24 — 650 BC: The First Coins
15:24 — How Governments Start Ruining Money
17:18 — The Henrys of England
18:13 — How America's Gold Standard Worked
19:59 — 1900: The Dollar Defined as One Twentieth of an Ounce of Gold
21:04 — What Is Fiat Money?
22:25 — Dimes and Quarters Were 90 Percent Silver Until 1964
23:56 — Bolivia, 1985
25:49 — What Is the Federal Reserve?
27:12 — 1933: Roosevelt Seized Your Gold
28:52 — What Is Inflation? Change the Definition, Change the Blame
30:47 — Jack Kemp: Wet Streets Don't Cause Rain
32:36 — France, 1715: John Law and the First Paper Hyperinflation
35:03 — Back to Sound Money: The Specie Resumption Act of 1875
36:42 — Hamilton's Bank and Jackson's Veto
38:53 — The One Year With Zero National Debt
39:36 — What If We Had No Central Bank?
41:12 — Booms and Busts Come From Erratic Monetary Policy
43:37 — How Overprinting Interferes With Supply and Demand
45:38 — The Federal Reserve at 113 Years
47:39 — Rising Prices Are a Monetary Phenomenon
48:43 — The Lockdown Checks and the Inflation Reduction Act
50:18 — Leadership, Courage and the Hangover
53:31 — Reagan and Thatcher Stuck It Out
55:38 — Put the Heat on Congress: Stop Spending
56:43 — The Appropriations Member Who Did Not Know What to Do With Us
57:42 — Be the Leaders We Are Looking For
58:08 — Next: Myths and Misconceptions in Economics
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