> Bryan decided that he wanted America to have a bimetallic currency. Unfortunately, there was a political class united in its opposition to this policy. That meant he needed a president that favoured it.
This gets the causality backwards. What Bryan decided was that he wanted to be President, and that in order to become President he would need to associate himself with an issue hot and controversial enough to attract voters to him for having taken their side on it. Bimetallism was a live-wire issue among the rural constituency he wanted to set himself up as the champion of, and it had few other champions due to the oppressive orthodoxy the gold standard held over the thinking of the time, so he chose that as the issue to wrap his arms around.
It worked -- Bryan stood out to rural voters as the one politician who really understood their needs, and his career as "The Great Commoner" was born. But Bryan's adoption of bimetallism came because he recognized its political potency, not because he held strong opinions about the economics of the matter. He cared so little about those that, when questioned about the details by an Omaha newspaper, he replied that "I don't know anything about free silver. The people of Nebraska are for free silver and I am for free silver. I will look up the arguments later."
He also ran for President for three out of four elections between 1896 and 1908 without winning. That's unheard of these days. The last major party losing candidate to run again was Richard Nixon in 1968. Ross Perot also ran, and lost, in 92 and 96.
It's very strange that losing a Presidential general election is seen as the end of a political career when in years past, candidates like Bryan, Stevenson, or Dewey were still seen as viable.
Also, your explanation of Dewey choosing a political stance that was widely held among voters but somewhat taboo among the political class and riding that stance to prominence shows that there's really nothing new or innovative in the wave of populism sweeping Western democracies in recent years.
> It's very strange that losing a Presidential general election is seen as the end of a political career when in years past, candidates like Bryan, Stevenson, or Dewey were still seen as viable.
It's true, but it's worth noting that while in modern times losing is generally a career-ender for candidates it is much less so for the operatives behind the scenes, some of whom spend their whole careers cycling from one losing campaign to another. The most striking example of this is Democratic consultant Bob Shrum, who was behind the curtain for a remarkable eight losing presidential campaigns. (See http://www.washingtonpost.com/wp-dyn/articles/A9895-2004Sep9... for a good profile of Shrum, written as he was on his way to his eighth defeat in 2004.)
I can't find a simple list of his eight losing campaigns. I can see that he worked for Kerry in 2004, Gore in 2000, McGovern in 1972, Ted Kennedy in 1980, Bob Kerrey in 1992, and both Gephardt and Dukakis in 1988, but that only adds up to seven. It turns out he also worked on Ed Muskie's campaign in 1972.
To be fair, though, between the years of 1972 and 2004, the only two winning Democratic candidates were Jimmy Carter and Bill Clinton.
That's not "to be fair," that makes it so much worse! Between 1972 and 2016, he supported 8 losing Democratic campaigns and did not support any of the 3 winning Democratic campaigns? That's an extraordinary losing streak!
He retired before 2008, so Obama doesn't count. He worked for one of Clinton's primary opponents back when Clinton himself was a dark horse candidate, and he actually resigned from Carter's 1976 campaign after ten days, writing to the future President, "I am not sure what you believe in, other than yourself." So it basically boils down to, "he never worked for Jimmy Carter or Bill Clinton".
You could tell a similar story for any Democratic strategist with an overlapping career. Tad Devine worked for the failed campaigns of Mondale 84, Dukakis 88, Kerrey 92, Gore 00, Kerry 04, and Sanders 16. (He also worked in Ukraine on Viktor Yanukovych's winning 2010 Presidential campaign, alongside Paul Manafort. Small world.)
Also, if you work for a successful Presidential election campaign, you end up working in the White House, e.g. George Stephenapolous, Karl Rove, David Plouffe, David Axelrod, and Steve Bannon.
This is likely because the number of viable candidates today is much larger due to population growth and access to media.
In 1904, getting famous was much harder than now, so someone already known to the voters, even as a loser, could have a better chance than a yet-unknown.
I wonder if negative campaigning also plays a role. Candidates like Hillary Clinton and Al Gore have faltered due to the cumulative effect of years of attacks, while candidates like Obama who appeared out of nowhere were more successful.
Check out 19th century negative campaigns. Modern politicians look like kittens. Pamphlets were published comparing Lincoln to an ape.
Candidates like Clinton falter because they suck. Kicking off your campaign Roosevelt Island and driving to Pennsylvania or wherever in a hotel shuttle van was the kickoff to a weak campaign.
The audience was different. Candidates were selected in party conventions in back room deals, the name recognition that mattered was with party machinery.
Bimetallism can never work, because the amount of silver relative to gold is never fixed. It has all the fundamental faults of "pegging" one currency to another.
You could read a biography of Bryan; he was an important figure of the era, so there's plenty to choose from.
A great short biographical sketch can be found in Richard Hofstadter's classic The American Political Tradition and the Men Who Made It (https://www.goodreads.com/book/show/773961.The_American_Poli...), which is an excellent, compulsively readable book, though Hofstadter had a low opinion of Bryan so this is not the source to turn to if you want to argue with me. The "I will look up the arguments later" quote can be found in Robert Cherney's A Righteous Cause: The Life of William Jennings Bryan (https://www.goodreads.com/book/show/1704339.A_Righteous_Caus...), which I haven't read myself but looks to be a good general-interest book-length biography. A contrarian view on Bryan can be found in Michael Kazin's A Godly Hero: The Life of William Jennings Bryan (https://www.goodreads.com/book/show/79196.A_Godly_Hero), but the rehabilitation of populism has been a project of Kazin's for decades now, so it will come as no surprise that Kazin has more respect for Bryan than most historians.
The dispute over bimetallic currency is now more than a hundred years old and has been made entirely moot by the floating US dollar and the post-Bretton Woods international monetary order.
Setting aside the technical detail (gold vs. silver), the debate was really over hard vs. soft money. The issue is as relevant today as it was in the 1800s.
Hard (scarce, gold) money policies favor lenders, who care very much about getting the full real value of their loans back. Inflation eats into their returns by decreasing the future value of money.
Soft money policies favor borrowers, who pay back loans in ever cheaper currency through inflation. Buy a farm today with a 10-year loan, and every year the real value of the money you pay back (factoring inflation) decreases.
What we see with a lot of the interest in Bitcoin is a direct reaction to decades of soft-money policies by the world's governments.
Here's the money quote:
... There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests upon them. ...
This is what the Cross of Gold speech was about, in a nutshell.
It's not like there was no inflation in the gold standard era. It's just that inflation wasn't under anybody's political control - I guess if there was a gold rush you had a lot of inflation and if there wasn't you didn't.
The free silver movement was a political attempt to redistribute money from one group (lenders) to another group (borrowers, but specifically farmers) by deliberately causing a one-off burst of inflation. The original goldbugs opposed it (correctly, as the author points out) for that reason. Bryan supported it because he knew it would win him the votes of those who would benefit.
The same is not true of modern fiat currencies, which are for the most part managed quasi-independently with the goal of a relatively constant low, but non-zero, rate of inflation. This is better than either the gold standard or the free silver situation (both of which involved large bursts of inflation at unpredictable times), since the inflation rate can be priced in to interest rates.
It is possible to maintain a principled objection to this on the grounds that the political consensus could break down and we could start manipulating inflation for political reasons again. I'm glad we have people who worry about that, but I don't feel the need to join them.
I have a feeling that the ratio of 'principled objection' to 'economically illiterate' is, uh, not that high though.
Moderate inflation is easily factored into repayment terms. What inflation penalizes is keeping your money under your mattress. This creates demand to use money now which creates economic activity.
> a lot of the interest in Bitcoin is a direct reaction to decades of soft-money policies by the world's governments
Bitcoin came from and was nurtured by monetary cranks but they are a small fraction of why people are interested in it lately. Today it's an investment asset or a means to do something illicit like dodge currency controls or launder money.
Moderate inflation is easily factored into repayment terms.
Constant inflation is easily factored in. But inflation varies greatly depending on prevailing conditions. The ruling party has an incentive to push for inflationary policies to stimulate short-term economic activity, leading to bouts of inflation that can wreck lenders over the long term.
What inflation penalizes is keeping your money under your mattress.
Inflation also punishes prudent investors - the kind who save for retirement.
Rising inflation leads to asset bubbles as pre-retirees seek to avoid being destroyed by inflation. Stocks without earnings and real estate, for example. They all get pushed up to ridiculous levels in the name of chasing return to avoid getting clobbered by inflation.
Not to mention the harmful ecological consequences of inflationary policies that encourage consumption over saving.
You have it backwards. Rising inflation does not create asset bubbles. In fact, rising inflation has the ability to deflate asset bubbles.
For example, we are arguably approaching an asset bubble right now because of a decade of low inflation and low interest rates. In a zero inflation, zero interest rate environment nobody is incentivized to hold cash(since it returns zero) or CDs thus risk assets (ie. stocks) become inflated.
I can think of three recent examples where inflation/soft money policies triggered asset bubbles:
- gold from late 1970s to early 1980s (CPI inflation)
- US real estate late 1990s to 2008 (excessive loan origination)
- US stocks from mid 1990s to 2001 (lax margin requirement)
For example, we are arguably approaching an asset bubble right now because of a decade of low inflation and low interest rates. In a zero inflation, zero interest rate environment nobody is incentivized to hold cash(since it returns zero) or CDs thus risk assets (ie. stocks) become inflated.
An inflation rate of zero would incentivize many people and groups to increase cash holdings. With no inflation to keep at bay, cash becomes a real no-risk bet.
Those doing so would no doubt the interested in real rates of return. For years, investors in CDs endured a negative real rate of return due to inflation. This forced people out of cash and into ever-risker assets.
Throw in mild deflation, and the average Joe could make a real return of a percent or two just by holding cash. It could trigger a stampede of sorts into cash and out of stocks, which explains why central banks are so keen to avoid even mild deflation.
The dynamic he's describing is about inflation relative to its expected value at the time of the deal. If you expect inflation to avg X% over the course of the loan and it ends up being so, then it's factored into the nominal rate of the loan and neither of the situations he describes come to pass. It's also mainly applicable for fixed rate loans only. So yea, it's pretty reductive.
And today's monetary policy is focused targeting predictable inflation rates over a period of time, which actually makes estimating it for credit purposes much more predictable than in the gold standard era, when it was zero with massive variance
Bryan's "Cross of Gold" speech was made when audio recording technology was being born, so in a little miracle of technology, we can actually hear the man himself give it today: http://historymatters.gmu.edu/d/5354/
(The recording is from a later 1925 performance of the speech by Bryan, not from his original performance that famously turned the tide of the 1896 Democratic National Convention. But it's still a fairly unique opportunity to hear a speech from that era in the voice of the man who gave it.)
I find the "Free Silver" movement fascinating because it sheds a light on how much we take our current economy for granted. Before I started to read about economics on my own I heard many times about the evils of easy credit and inflation but never had I heard about the problems of deflation and scarce money.
Yup and thankfully now we have so many different money systems that one can decide where to keep their value. People need not keep cash under the mattress if they dont want to. You can hold scarce assets that appreciate over time and only hold inflationary fiat when you need to purchase something. Thus you will never be pressured to spend all your money because most of your "money" isnt being held in inflationary assets.
We are told that inflation is good because it encourages spending but i would argue that such an effect is being dimished because many deflationary assets are traded on liquid markets.
That's kind of the point, right? Inflation encourages spending, but it also encourages investment, and your saved money can be invested in stocks and bonds, which also stimulate economic growth more than being stuffed in a mattress.
The Wizard of Oz as an extended allegory for bimetallism was a theory proposed by Littlefield in the 60s, and it's been pretty much thoroughly debunked by literary scholars who point out that the characters are essentially common character tropes from 1890s literature, and biographers who pointed out that it's completely contrary to the views that Baum himself held.
Well then I suggest you take a trip to Wikipedia and start editing. For that current bit of trivia there are no less than 4 citations, three of which are from this century.
Very interesting piece, and a fascinating blog in general. Seeing someone document their ongoing struggle to understand the world reminds me how little I've done about that myself.
This gets the causality backwards. What Bryan decided was that he wanted to be President, and that in order to become President he would need to associate himself with an issue hot and controversial enough to attract voters to him for having taken their side on it. Bimetallism was a live-wire issue among the rural constituency he wanted to set himself up as the champion of, and it had few other champions due to the oppressive orthodoxy the gold standard held over the thinking of the time, so he chose that as the issue to wrap his arms around.
It worked -- Bryan stood out to rural voters as the one politician who really understood their needs, and his career as "The Great Commoner" was born. But Bryan's adoption of bimetallism came because he recognized its political potency, not because he held strong opinions about the economics of the matter. He cared so little about those that, when questioned about the details by an Omaha newspaper, he replied that "I don't know anything about free silver. The people of Nebraska are for free silver and I am for free silver. I will look up the arguments later."