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Agreed on all counts. I admit I find the graphs of trends starting in 1971(-ish) fascinating, but of course the 1971 graph people never talk about the combination of short-term drivers (e.g. oil supply shocks) and long-term drivers (e.g. globalization, computer revolution) that shaped the economy over this same period, or the difficulty of actually explaining what these trends had to do with closing the gold window.

Life is full of fascinating but ultimately misleading coincidences.




The "Wtf happened in 1971?" meme is the poster child for being skeptical of mono causal explanations for complex issues. There have been a ton of other events since 1971 that are likely major contributors. In addition to the things you pointed out, 1972 is the year that Nixon went to China. Automation has replaced a lot of workers. The size of the workforce increased dramatically. We experienced the dawn of the information age. All of those things are going to contribute to stagnant or reduced real wages. Especially for those at the bottom of the wage distribution who are going to be most vulnerable to offshoring and automation.


And I would guess that monetary policy has disproportionately benefitted the wealthy, but that's only because I assume that all policy benefits the wealthy unless it's specifically designed to help the not-wealthy.

Nobody remembers that the gold standard used to be viewed as a "cross" on which poor farmers were crucified, hence we needed to massively expand the money supply with silver.


Even policies specifically designed to help the not-wealthy often disproportionately benefit the wealthy.

Yes, in addition to demonstrating the weakness of mono-causal explanations it's also a good use case for Chesterton's Fence. We moved away from the gold standard for a lot of reasons. For example, as bad as inflation can be deflation is unquestionably worse. And we haven't had any major shocks to the economy that are anywhere near as severe as the depressions that were experienced prior to ditching the gold standard. This could just be good fortune, but you at least have to consider it when deciding if you want to go back to hard money.


Also, on several of the charts it's fairly clear that the inflection point isn't 1971, and some of the other policies with a fairly obvious causal relationship with widening of income inequality (like top bracket tax cuts) are those typically endorsed by those wishing to return to the gold standard


Most goldbugs, and many crypto boosters, are just hyper-individualists. "I keep my money and it doesn't lose value" is the only criterion they care about in a monetary system or a tax system. Hence the support for both constricting the money supply and low taxes, especially on the high-income bracket they usually reside in.


Housing really started to shift in that time frame.




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