'Death of the West' Jude Wanniski January 14, 2002

Memo To: Pat Buchanan
From: Jude Wanniski
Re: The Good Old USA

I watched you Sunday morning on Meet the Press with Ralph Nader, being interviewed by Tim Russert, and Sunday night discussing your new book with Bill Press, again with Russert. You are getting a respectful hearing on The Death of the West, I think, because you are back in your intellectual role as a commentator, not directly threatening the political establishment. If your projections are correct, and I have no reason to doubt your methodology, the United States in another 50 or 75 years will be a different kind of nation with a different kind of culture. The “European” Judeo-Christian foundations of America cannot be sustained with its present birth rate and an immigration policy that floods the country with “non-West” Latins, Asians and Muslims that have higher birth rates. Even while Russert and Press argue with you, that if this is the way the good old USA will develop, “so be it,” they clearly are nagged by the thought that one thing will lead to another. Perhaps the tidal wave of legal and illegal immigrants will continue at a pace that will lead not to assimilation, but to an unhealthy fragmentation of American society, even atop the gulf between blacks and whites.

I’m sorry Russert ran out of time on Meet the Press just when it was getting interesting in your exchange with Ralph Nader. He clearly has the same nagging concerns, but said we would not have this problem, if it is a problem, if we would change our foreign policy – in a way that would make it more likely that foreigners would voluntarily choose to stay at home instead of having to come to America to make a living. As we have discussed this many times, you know I think you would have gotten a lot more votes in 2000 if you had taken this positive approach on how to keep America a "Western nation" even as it internationalized its responsibilities to the rest of the world. Change our foreign policy and export growth instead of the IMF/World Bank poison!! "Foreigners" would rather stay home, as Nader said, than uproot themselves to come here to make a living.

As offbeat as it may sound, Pat, there is no single thing we could do right now to make that happen than a restoration of the dollar/gold link. When the dollar was as good as gold, the rest of the world could link to it and grow around a stable unit of account. Under Bretton Woods, there were no "IMF loans" to desperately poor third-world nations. The IMF role was to monitor the BW system and provide short-term help to countries trying to avoid devaluation from the $35/oz. central gold link. Private banks arranged the third world loans and did a good business when they got paid back. After 1971, with the floating dollar, growth stopped in the third world and the banks wound up with bad loans. The IMF was then given the job of "collecting," which meant getting the hard cash out of U.S. taxpayers and "giving" it to the bankrupt country, which of course never saw the money. It went to the banks to clear up the bad loans. It was a corrupt system from the start and has become totally corrupt by now. You know all this, but you still approach the problem with rhetoric that you should know by now does not fly with the American people. Put up big fences to keep them out? On opposing this, Nader is right, although I have not heard him express himself this way in his campaigns. He hasn't taken on the IMF, has he? I’ve always wondered why. Maybe it is in his institutional and political interest to clam up. Why not ask him. Take him up on his offer and have common cause?

If you want your prediction of a fragmented world to come true, with Scotland and Wales splitting away from the U.K., and pieces and provinces of the European countries wanting to get out on their own, you should oppose a universal gold dollar. As we have seen with the collapse of Argentina’s economy in recent days, there is no way a country can fix its unit of account to the floating unit of account of the United States without eventually finding itself whipsawed. When then-Fed Governor Wayne Angell and I went to Moscow in 1989, at the invitation of the USSR central bank, we told it that unless it linked its ruble to gold as the first step in converting from a command economy, the USSR would split up into little pieces. Without a gold anchor, the “shock therapy” it was attempting on the advice of our Ivy League economists would induce a ruble inflation that would cause all the varied ethnic and religious “republics” to head for the exits, to save themselves with their own currencies. A gold/ruble, we told them, would have the opposite effect. The perimeters of the USSR would be eager to stick to a mother country with a sound money.

No matter what it says, our own political establishment really does not want the rest of the world to grow. Or it would not manage things as it does. It likes things as they are, which is why it maintains support for a floating dollar -- one it can manipulate not only for economic gain, but as a means of keeping a whip hand over the developing world. Where you see “globalization” as an ugly process and “nationalization” as the wave of a populist future, I think we can get to an optimum point where the good old USA provides global standards of money and taxation and at least minimal standards of human rights. Aliens, who are here now and should not be, would on their own return to their homelands, where opportunities for fulfillment of their lives and the lives of their families would be much expanded. Ronald Reagan said how many times, Pat, that he knew of no great nation that left gold and remained a great nation. Always the poorest people benefit the most from fixed standards of measure while the insiders who know how to play the money game prefer no standards at all. If you are serious about restoring a gold/dollar link, as you indicate to me from time to time, let’s get together with Nader and a few other folks of the honest left and honest right and put together a movement in that direction. There does not have to be a decline of the West if there is a good plan to keep it alive and well.