Thread: Ted Cruz backers plan $1 million push on gold standard

Ted Cruz backers plan $1 million push on gold standard

Teddy Schleifer

By Theodore Schleifer, CNN

Updated 2:36 PM ET, Tue December 22, 2015

(CNN)They're putting gold behind gold.

A new group inspired by Ted Cruz's plan to tie the U.S dollar to a unit of solid gold is planning to spend up to $1 million to back his hopes in New Hampshire, a well-financed push meant to elevate him to first-tier status there on the appeal of an offbeat issue.

The Lone Star Committee, a new organization filed under section 527 of the tax code, is planning to flood the Granite State airwaves with radio ads highlighting Cruz's plans for a sound dollar.

Given that Cruz's biggest financial supporters have been slow to sink resources into New Hampshire, Lone Star's investment is shaping up to be the biggest play yet by Cruz forces to perform well in a state that might not naturally be drawn to a tea party renegade.

The new tax-exempt group plans to broadcast only issue spots, steering clear of more overt language used by super PACs to directly back their candidate or, more commonly, attack their rivals.

"We see ourselves as waging the idea battle on economics, at least to Republican primary voters," said Rich Danker, the GOP strategist behind the group who believes monetary policy matters to voters. "It's overrated how much how they drift toward personality. At the end of the day, it's really where the candidates are on policy."

The wonky outside spenders are the latest addition to the fold of overlapping, at times diverging, groups trying to spend big money to support Cruz independently. But it is the first Cruz group dedicated to issue spending, which several presidential candidates have used to give an extra boost to their primary bids.

The group does not appear to have the blessing of the Cruz campaign in Houston, which Danker said he has had no contact with since launching.

"They would probably be most comfortable not having to worry about what I'm doing," said Danker, explaining why he didn't seek the permission of Cruz aides. "I wanted to sort of do things that would lead the campaign in the direction of emphasizing their economic message and showing them it can work."

The Cruz campaign did not respond to requests for comment.

But the founders are no strangers to Cruz circles. Danker met privately with Cruz for an hour last year when managing the New Jersey Senate race of Republican Jeff Bell, and he is a close associate of Sean Rushton, Cruz's top economic adviser, who Danker says inspired him to set up a group like Lone Star.

The group, which Danker said raised about $100,000 in the first week, is budgeting toward a $1 million buy focused almost entirely in New Hampshire, where Cruz has climbed but still remains solidly behind Donald Trump, who has led polls there for months. It's hired a North Carolina fundraiser, Jay Rao, to collect big checks. And they're planning to have a rapid-response arm dedicated to what they say will be feverish attacks on Cruz's contentious backing of the gold-tied dollar.
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"They came fast and furious, and they did not stop for the past two months," said Brian Domitrovic, the policy mind behind the group, who expects continued criticism of Cruz on gold. "We'll be ready for it."

Cruz broached the gold standard in his well-regarded showing at the CNBC debate two months ago, although he does not push aggressively for it on the stump

"Instead of adjusting monetary policy according to whims and getting it wrong over and over again and causing booms and busts, what the Fed should be doing is, number one, keeping our money tied to a stable level of gold," he said on stage, agreeing with Rand Paul that the Federal Reserve is a "series of philosopher-kings."

Bashing the Federal Reserve has become in vogue for Republican hopefuls, but Cruz's plan to limit changes in the value of U.S currency by tying it to gold remains controversial in mainstream economics. When the University of Chicago asked 40 leading economists three years ago if Americans' lives would improve with a gold standard, not a single one said yes.

"This is the most idiotic idea I have ever heard from a presidential candidate. The entire economics profession thinks it's a joke," said David Blanchflower, a leading monetary policy expert at Dartmouth. "It would be more sensible to go on the goldfish standard."

Asked if he could envision the issue having any appeal with GOP primary voters in New Hampshire, Blanchflower replied: "None whatsoever."

Cruz's backers disagree, pitching the issue as a political winner for a Republican electorate skeptical of centralized power in the Federal Reserve, especially in libertarian-leaning New Hampshire.

Unique tax structure

One potential obstacle for organizers is their decision to file as a 527 committee, rather than the two options most commonly used today by big money operatives: a super PAC, which must disclose the identities of donors, or as a nonprofit, which can shield those names but cannot run as many advertisements calling for the direct election or defeat of candidates.

Lone Star shares more in common with a super PAC — Danker said it plans to disclose its donors monthly to the IRS. But the other big campaign spender that is choosing to file with the IRS, a nonprofit supporting Marco Rubio, Conservative Solutions Project, has been criticized by Republican rivals and campaign finance reformers for hiding the names of people with a large influence on the political process.

In some ways, Lone Star will suffer the worst of both worlds: The group would not be able to spend more than half of its money on federal express advocacy, said Jason Torchinsky, a Republican campaign finance attorney, even though it will still identify its donors. Danker defended the tax incorporation as the best option for an issue-based group, though he said it could reclassify as a super PAC in the future.

"Since Citizens United, when you can have super PACs do unlimited express advocacy with unlimited corporate and individual dollars, what they're doing would be rare," Torchinsky said.

http://www.cnn.com/2015/12/22/politi...ard/index.html

Why Republicans Still Love the Gold Standard

By ERIC RAUCHWAYNOV. 13, 2015

In Tuesday’s Republican presidential debate, Senator Ted Cruz reintroduced an idea that had many viewers scratching their heads and nearly all economists pulling out their hair. Mr. Cruz advocated a return to the gold standard — that is, tying the value of a dollar to a set amount of gold — because, he said, it produced prosperity under the Bretton Woods system and it helped “workingmen and -women.”

Mr. Cruz is confused about history and economics. The framers of Bretton Woods specifically designed their new international monetary system not to be a gold standard because they believed gold-based currency was largely responsible for the Great Depression. Their system, named for the New Hampshire town hosting the 1944 international conference that created it, was not a gold standard but “the exact opposite,” according to John Maynard Keynes, one of the system’s principal designers. Under Bretton Woods, nations were not obliged to set monetary policy according to how much gold they had, but rather according to their economic needs.

Leaving his historical errors aside, Mr. Cruz is not the only Republican presidential candidate to express admiration for the gold standard: Senator Rand Paul and Ben Carson have, too. The gold standard has long been a pet cause among some conservatives (it was hinted at in the 2012 Republican platform) and has gained credence among mainstream Republicans as a tool to limit government influence over the economy.

But a return to the gold standard would be catastrophic, especially as we continue the climb out of our Great Recession. That is because, as the framers of Bretton Woods knew, the course of an economy depends not only on what happens, but on what people expect will happen.

Under a gold standard, the amount of gold a nation holds in bank vaults determines how much of its money circulates. If a nation’s gold stock increases through trade, for example, the country issues more currency. Likewise, if its gold stock decreases, it issues less.

Gold as currency has obvious problems. First, there is relatively little of it while there are more people and goods all the time. So in the long term, the gold standard exerts a downward pressure on prices as money becomes relatively tighter and its value increases. If prices continue to decline, people are less likely to spend their money. After all, if you believe that the price of, say, shirts will continue to drop, you’ll delay splurging on haberdashery.

With enough time, the gold standard can create a deflationary spiral that brings an economy completely to a halt — which is what happened in the Great Depression. It was for this reason that Franklin D. Roosevelt abandoned the gold standard in the first days of his presidency, declaring that he would make the dollar into a “managed currency” the value of which policy makers might increase or decrease in response to economic need. In giving policy makers the power to regulate the money supply as they saw fit, Roosevelt created the expectation of a turn toward inflation, giving people reason to spend more money in the short term. (As Keynes observed, inflation causes problems, too, but at least it encourages spending, while the expectation of deflation can “inhibit the productive process altogether.”)

Recovery began as soon as Roosevelt took office in March 1933, and his use of the dollar to spark recovery created the basis for the adoption of managed currencies around the world. Eleven years later, Bretton Woods gave multiple currencies fixed but adjustable rates. Nations now had precisely the freedom the gold standard denied them, to use monetary policy to regulate their economies. (The United States dollar had a nominal value in gold of $35 an ounce but the country was not obliged to set monetary policy according to how much gold it had.)

Mr. Cruz correctly notes that the world economy enjoyed decades of prosperity under Bretton Woods, but that happened without a gold standard, not because of one. Why is a discredited policy now attractive to Republicans? The gold standard suits a political moment. Tying the dollar to an arbitrary quantity of shiny metal binds policy makers’ hands, robbing them of their discretion to act: The central bank can’t adjust the money supply to counteract crises or prevent them. These limits, for many Republicans, are good things. The gold standard is essentially the monetary equivalent of a government shutdown.

A new Bretton Woods might be a good idea, to encourage greater international cooperation on monetary issues, but a gold standard is not, as nearly all economists agree. Even the mainstreaming of gold-standard talk can have bad consequences, should its proponents gain the ability to pressure central bankers to tighten the money supply, as a gold standard would oblige them to do. A return to the good old days of gold could leave us vulnerable to precisely the outcome Bretton Woods was intended to prevent: another Great Depression.

http://www.nytimes.com/2015/11/13/op...dard.html?_r=0

Oh man, come on! There is no way America can possibly withstand a change in our currency method at this time with the total absolute mess we have in DC. No way! We don't have anyone in DC we could possibly trust these days with such a system. We don't even have enough gold in reserve to do it. We would have to go in debt trillions of dollars more just to buy enough to manage our currency that's in circulation, and you have to buy it with money or debt, which would have to be backed by the gold you're buying, so how do you do that without generating a new Ponzi Scheme? Furthermore, our debt is already almost $20 trillion and there's only $10 trillion of gold in the entire world. So what good is a standard there's not enough gold in the world to back? We're way beyond the pipe dream of returning to a gold based monetary system.

But I see why people who own gold would like it, they'd make a fortune with the higher gold prices. In fact just talking about it could raise gold prices on the mere speculative prospect of it.

Cruz is more than "just a little bit of a maniac".

I watched that debate but missed Cruz statement about going back to a gold standard.

Here is what we need:

Excerpt from Rush Limbaugh Show "The Trump Effect"

Don't misunderstand. Trump has a significant number of conservatives in his base, but it's by no means the lion's share. The Republican Party thinks that Trump has come along and is getting the Republican base. They're not all that worried about it for that reason, 'cause they'd like to be rid of it. But the interesting thing is that what the Republican Party claims -- by the way, what the media and the Democrats say the Republican Party has to do to win the presidency, which I find laughable that they actually want to help. But what they say is, you Republicans, you can't win if all you're gonna get is your own voters. You're gonna have to reach out. You're gonna have to change who you are. You're gonna have to broaden your mind. You're gonna have to become less rigid. You're gonna have to become open and tolerant of a lot of left-wing type groups. Otherwise you don't have a prayer. Well, bingo.

Trump is doing it, not by reaching out to anybody, just being himself. Trump does not have one plan, there's not one specific plan or policy of Trump's that's aimed at a group. Trump is just taking his message out there. "Here's who I am, we're gonna make America great again. We're gonna build a wall. It's gonna have a great door in it. The Mexicans are gonna pay for it. We're not gonna let any more terrorists into this country. We're not gonna negotiate any more stupid deals, and we're certainly not gonna make ourselves look like the problem in the world. We're gonna be the solution." Yay! It doesn't matter where they come from, Americans are cheering it.

Yay! That's it. Well said, Rush.

For the full transcript:

http://www.rushlimbaugh.com/daily/20...e_trump_effect

Please no more talk of the gold standard. Talking about the not so lovely days of the gold standard to fix our economy is like someone suggesting we go back to horses and buggies to reduce our carbon footprint.

Cruz is in way over his head.

The only change needs to be the one our founders intended which is forbidding notes of any kind, and that would include Federal Reserve Notes, to be made a legal tender for all debts public and private.


In regard to the Federal Reserve Act of December 23, 1913, Congress unconstitutionally reassigned a power of Congress to regulate the value of our nation’s currency and placed that power in the hands of private banks. But what few people realize is the very intention of the Act was to create a money monopoly for a privileged group of private banks, and this was done by making Federal Reserve Notes a LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE, in spite of our founders expressed intentions to forbid Notes of any kind to be made a legal tender.


For those who are not familiar with our founder’s specifically stated intentions, here is what transpired during the convention with regard to bank notes being made a legal tender. SEE The Debates in the Federal Convention of 1787, reported by James Madison : August16


Mr. Govr. MORRIS moved to strike out "and emit bills on the credit of the U. States"- If the United States had credit such bills would be unnecessary: if they had not, unjust & useless.


Mr. BUTLER, 2ds. the motion.

Mr. MADISON, will it not be sufficient to prohibit the making them a tender? This will remove the temptation to emit them with unjustviews. And promissory notes in that shape may in some emergencies be best.


____ cut _____



Mr. READ, thought the words, if not struck out, would be as alarming as the mark of the Beast in Revelations.


Mr. LANGDON had rather reject the whole plan than retain the three words "(and emit bills")

On the motion for striking out
N. H. ay. Mas. ay. Ct ay. N. J. no. Pa. ay. Del. ay. Md. no.Va. ay. [FN23] N. C. ay. S. C. ay. Geo. ay.

[FN23] This vote in the affirmative by Virga. was occasioned by the acquiescence of Mr. Madison who became satisfied that striking out the words would not disable the Govt. from the use of public notes as far as they could be safe & proper; & would only cut off the pretext for a paper currency, and particularly for making the bills a tender either for public or private debts.

The irrefutable fact is, our founding fathers intended the market place, and only the market place, to determine what notes, if any, were safe and proper to accept in payment of debt, and they specifically chose to forbid folks in government to make a particular bank note, or any “note”, a legal tender, which if allowed would literally force people and business owners to accept worthless script in payment of debt.

As a matter of fact, one of the delegates to convention who helped frame our Constitution who lived in Connecticut was defrauded by a legal tender law made in Rhode Island which required him to accept worthless script in payment of debt. As one of the delegates to the Convention Rodger Sherman was quite influential in prohibiting our government to emit bills on the credit of the United States and likewise prohibiting folks in government making notes of any kind a legal tender inpayment of debt!

To lean how Roger Sherman was defrauded see his work titled: A Caveat Against Injustice … An inquiry into the evils of a fluctuating medium of exchange.


And, the question is, how is it not a crime for our Treasure of the United States and Secretary of the Treasury to sign Federal Reserve Notes which declare on their face “THIS NOTE IS LEGAL TENDER FOR ALL DEBTS,PUBLIC AND PRIVATE“? Should they not be charged with misfeasance and malfeasance in addition to complicity with a privileged banking institution who defrauds the public with unconstitutional Federal Reserve Notes?


JWK


"Of all the contrivances for cheating the laboring class of mankind, none have been more effectual than that which deludes them with paper money. This is the most effectual of inventions to fertilize the rich man's field by the sweat of the poor man's brow."_____ Daniel Webster.