Gary Johnson, 2012

He has smoked pot and taken cocain and says both were great. He runs several miles a day. A few years ago he climbed Mount Everest. He is geeky and at times a little egotistical. He supported Ron Paul. With all that weirdness can he be president in 2012? In some US libertarian circles his name keeps popping up. Why?

Here is the man talking about himself. You be the judge.

PART 1.

PART 2.

54 thoughts on “Gary Johnson, 2012

  1. Can Gary Johnson be president of the United States? Yes, it is possible. Is it probable? No. However, if this were a liberal blog in 2004 asking if Barak Obama could be president in 2008, most people would have said no- America is not ready for a (half) black president, he’s only a freshman Senator, etc.

    If Gary Johnson is serious about running, he could put up a strong fight in the GOP primary. He’s too far outside the establishment to be likely to win, but in American politics, anything is possible.

  2. He was a Governor for 8 years?

    Don’t write him off yet charles. It would be interesting to see why you think so.

    Drug issues: Carter nearly decriminalised pot and Dan Quayle said drug laws were utterly wasteful. There is a an element of bipartisanship from the non-wowsers.

  3. This was great to listen to, thanks for introducing me to this guy.

    He strikes a note with the public. Listen to the wild cheers from the audience when he set “we need to abolish the Federal Reserve”.

  4. “It would be interesting to see why you think so.”

    Considering most of Charles’ comments here, I doubt it.

  5. Bah, he’s speaking to Ron Paul supporters. They’re gonna cheer at everything this man says…rightly so though. Well, I hope he puts up a fight at the next primaries. Economics is more important to me so I could support Sarah Palin but this man comes off as far less insane.

  6. Jono — that’s just because it’s a Ron Paul rally. The monetary policy stuff of Paul & co is their weakest link intellectually.

    But this sounded good. Young enough and cashed-up. He could make another Paul-like splash at the next primary, insh’allah. I doubt he would get the primary, but if he could keep the movement alive then he would have done well, and there’s always an outside chance.

  7. He’s great isn’t he. He’s just so issue focused and seems like a real policy geek.

    You never know. But he could be great.

  8. I was most impressed by his speech. Possible a little lacking in humility. Barak Obama won more hearts and minds by calling himself a mongrel than did by Johnson declaring himself the fittest 50 year old. Also it was dumb as well as bad politics to bag capital punishment.
    Other wise he seems possibly the great white hope for 2012 if you will excuse the pun.
    Honest, straight forward, and appealing to the deep down sentiment in most non-idealogical people that bureacracy causes more problems than it serves.
    Normally he would have no hope but…..the left winger, never had a productive job in his life, product of the Chicago political machine did it despite his shady connections to racists and bombers, so why not the self made man, right wing kook from out west.

  9. I have met Governor Gary Johnson and he would get the full support of millions of Americans in the drug-law reform movement. Mr. Johnson has unassailable integrity, huge intelligence, a great mind, a thorough understanding of the US Constitution, great principles of limited government. He is articulate, sincere and accessible. Indeed, I welcome the news of Mr. Johnson’s candidacy. He is just the revitalization the Republican leadership requires.

    To add your support for the GARY JOHNSON in 2012 campaign, go here
    http://www.facebook.com/home.php#/group.php?gid=38552147212&ref=nf
    and here
    http://www.facebook.com/note.php?saved&&suggest&note_id=34388455786#/pages/Gov-Gary-E-Johnson/34532047361?ref=nf

    Johnson will need to start the dinner & speaking circuit now to develop a leadership role by the next mid-term (2010) election. Our support now may be influential. Calling all Ron Paul Republicans, libertarians, conservatives: let Gary Johnson know you would support his 2012 bid.

    Ron Paul will be 77 in 2012, I think too old to run for the Presidency, and I love Ron Paul. He’d be an excellent adviser to Johnson. I think Ron would come around to supporting Gary Johnson for the leadership of the Republican Party. I know Dr. Paul is an admirer of Johnson’s record as Governor of New Mexico.

  10. Mark

    GOP is in a mess, it has degenerated in the party of the religious nutters, you know the ones who believe you should at least burn all science books. These people are not going to support someone with liberal social views.

    When it comes to the Democratic party Obama will be running, so thats out. He would have more chance there, he, unlike Clinton inhaled, small difference.

    As an independent he has no chance. Short answer no.

  11. As much as I agree with you charles, individual determination is hard to measure. Nixon came back from the dead, as did Gore, Biden and Howard and Gary Johnson has more mass appeal than Ron Paul.

    Like John, I wish he understood monetary economics better. What may be in his favour is that the recriminations may fall upon the religious right. The moral majority were Democrats before Carter shunned them, you know?

  12. Anyone here actually endorse the current monetary system ?

    i.e a central bank + fractional reserve banking + no redemption in specie (i.e fiat money)

  13. The only problem of significance that I have with the current monetary system is the rate at which base currency is created / destroyed. If it was created / destroyed according to a rigid gold price rule, if interest rates were allowed to float with no capital controls, and if enough nations adopted this approach so as to create a critical mass, then I would be happy enough to retain a central bank to deal with bank liquidity issues (preferably privatised and exposed to competition), fractional reserve banking (ie banking) and a non redeemable currency backed by the current mix of bonds and foreign reserves (with an appropriate prudent attitude to the normal risk considerations applicable to any portfolio of assets). As such the major parts of the monetary policy reforms I would want for the world could be up and running in a few days if the political will existed.

    I can see the merit of governments vacating the currency business entirely and of private currencies filling the void and of an end to legal tender laws and other such politically and technically complicated reforms, however they would offer only very, very marginal improvements over a fiat currency manged according to a rigid gold price rule.

  14. Ron Paul’s biggest weakeness IMO is actually his position on abortion and his endorsement of Chuck Baldwin from the Constitution party. This party basically wants Biblical law for the US and does not respect the separation of church and state. Therefore they are explicitly anti-freedom. And therefore Ron Paul has compromised on a basic principle of freedom. I couldn’t support Ron Paul and am skeptical of those who support him.

  15. “and if enough nations adopted this approach so as to create a critical mass”

    Why does that matter? What is the major risk in, say, Australia adopting a monetary policy as you’ve described without any other country doing it?

    “retain a central bank to deal with bank liquidity issues (preferably privatised and exposed to competition)”

    If it’s privatised is it still a central bank?

  16. Greego – I do advocate a unilateral approach to the gold standard. However it is best if most nations follow the lead and adopt the same approach. If you are on your own with a gold standard you do suffer a few possible political problems. If neighbouring countries devalue their currency relative to yours then unless you move the value of your currency also the result is not dissimilar to a short term tariff on your exports and a subsidy on your imports. In which case a gold price rule alone might not be sufficient because it can succumb to political expediency more readily than a fully private currency alternative.

  17. Well we are there, and we got here quicker than I thought we would (June was my guess). When it comes to inflation every one is now predicting deflation, and there is now talk of zero interest rates in the US.

    I wonder how banks are going to make a buck if they don’t lend.

    I wonder if those that where predicted runaway inflation because the central banks where shoving paper out the door will try and understand why we have deflation instead.

    I wonder how long the gold lovers will love there gold as it’s value in paper continues to fall.

    I wonder how longs capitalists will be in this general funk.

    I wonder how long the population will tolerate the general funk, will the central banks get into direct mortgage lending?

    Not much money to be made in the short term money markets that is for sure.

  18. However it is best if most nations follow the lead and adopt the same approach. If you are on your own with a gold standard you do suffer a few possible political problems.

    I’m no economist, but this admission pretty much kills the idea stone dead.

  19. Greego – large banks under free banking act as clearinghouses and quasi central banks. But their motives are tied to market forces and reflect economic values and they can handle volatility better than a central bank since they have a profit motive.

    Now Paul said “create money out of thin air” (ciggies & cash video on you tube). This infers to me he supports a 100% reserve requirement. I hope it doesn’t.

  20. Thanks Terje and Mark – I figured such clearing house banks would arise in a free market but the name ‘central bank’ to me implies government-granted exclusivity.

    Mark, I think Paul deserves a little more credit in the monetary policy area – I’ve never heard him specifically say that fractional-reserve banking should be outlawed, only that the centralised/cartelised banking system we have now is both immoral and unworkable. And I’ve definitely heard him propose competing private currencies rather than a centralised gold standard. I’d be extremely surprised if he didn’t support completely free banking.

    Tim R, a libertarian objection to abortion is an internally consistent position to hold if you accept that human rights beging at conception (I don’t – I think people need to understand their rights before they can claim them, ie we aren’t conceived or even born with them.) In all other cases he’s a genuine libertarian; arguably the most visible libertarian in the world at the moment.

  21. Fleeced – in my view what you are saying is like suggesting that we can’t remove tariffs until other nations do. To be sure it is politically easier and more beneficial to remove tariffs in a global setting where others are also removing tariffs but doing it unilaterally is still better than not doing it at all. Likewise with a shift to a ridgid gold price rule. It would be harder to do it alone but still better than not doing it at all. It would be worth it simply for the vastly cheaper cost of capital that it would allow.

  22. Well, I think I’ve misjudged Paul – but not many of his supporters.

    Terje – it is not quite like that. It is not a good system for Australia. A floating rate is. However, if everyone uses it, then there is a world currency and it is good for Australia as we get the general benefits.

    The distinction is subtle, but it is not the same as unilaterally declaring free trade as opposed to trade liberalisation and bargaining. It is a matter of the best kind of adjustment system we can have on our own (not the gold standard which on its own is undesireable) – but even if it is the least best and everyone else uses it, it becomes one of the best and desireable, and we get the general benefits.

  23. Mark – unless you are more specific a floating rate isn’t even a system. Perhaps you mean that fixing interest rates is better then fixing the exchange rate with gold. In which case I’d disagree. It is much better to let interest rates float and to fix the currency to gold.

    I know that adopting a gold standard unilaterally isn’t the same as adopting free trade unilaterally. What I said was that the argument in favour of unilateralism versus multilateralism in the two cases is non-dissimilar. If we move unilaterally to a gold standard we would get low inflation, low interest rates and a more flexible and efficient capital market. Our currency would still move up and down relative to non-fixed currencies and this would hurt some sectors at some times whilst helping other sectors. However we suffer this anyway with the current system so it isn’t a new problem.

    The only benefit of a floating system is that it allows you to devalue your currency at strategic times (eg when your trade partners and/or competitior nations are devaluing). However we don’t actively manage our exchange rate in this way anyway so it isn’t a real benefit in any case. It is better to have all the benefits of a gold standard because there isn’t any real significant downside. And if others nations ultimately follow our lead the upside is even greater.

  24. Mark, a question; Why is the gold standard undesireable on its’ own? I thought a lot of libertarians were metal-money types, and gold seems to be the preferred metal. Indeed, I’ve proposed that Gold be the colour of libertarians (leftoids have red, rightists have blue, etc.).

  25. I’ve explained before:

    1. A gold standard used universally would have many advantages.

    2. It is too easy to jump ship.

    3. Going alone has costs and this is not similar to arguing that trade barriers should only be broken down bilaterally.

    Put simply, a gold standard and fixed exchnage rate is not suitable for Australia (if done alone). The strucutre of our economy, state of internationalisation, impacts of adjustment and unfortunately, labour market rigidities simply does not make a good match with a unilateral gold standard.

    I suppose this will be the area of debate from now on, not that rejecting a unilateral GS is like rejecting unilateral trade liberalisation.

    But hey the RBA is tipped to drop rates to 3.5% and we have 5% inflation now. Gold looks attractive under these circumstances – you can’t print gold.

  26. Mark – we clearly disagree. You have not said what it is about the structure of our economy, the state of internationalisation, impacts of adjustment or labour market rigidities that make interest rate fixing the better option. What is it about interest rate fixing that is so great?

  27. I’m sure we’ve done this before and John and I gave you a better explanation:

    The internal price adjustment that gold works on could be very detrimental, given we already have price floors on wages. An adverse price move in adjustment may see a lot of unemployment.

    If we have an external adjustment, only about 20% of the economy is directly impacted. There is also a hedge – if commodity demand falls, so does our dollar. It is relatively painless.

    Interest rates shouldn’t be fixed – but a well run regime comes close to smoothing out the growth in money supply with the growth in money demand. The actual cost of capital has a buffer and is also more elastic.

    Different countries have different circumstances and in the absence of any free banking or global free trade, must choose according to their own particular characteristics.

  28. If we fix the price of the AUD to gold, and the international price of gold suddenly decreases, then we would need to print lots of money to keep our AUD-gold link constant. That could very easily lead to inflation.

    If the world was on a gold standard then the inflation would only be caused by gold-finds… which in turn would decrease the incentive to find new gold.

    But that self-correcting mechanism doesn’t exist if we’re a small country acting alone. The price of gold will be determined by factors outside the influence of Australia’s inflation rate.

    Instead of pegging the AUD to the price of any other asset it is best to have the “right” amount of AUD and then let the price of gold or USD be whatever the price wants to be.

    That doesn’t mean that we necessarily have to fix the price of loanable funds (ie interest rates). The supplier of money could instead directly manage the amount of base money they supply.

    If it was a government policy, the policy should be to release the amount of base money that leads to low inflation (ie inflation targetting).

    Alternatively, you could allow anybody to make money. This would probably be done by banks. People would prefer their money is backed by something… so the bank would have an incentive to only “make” new base money when they had assets to back it, which would happen as the economy grows.

    Perhaps the banks would use gold to back their currency. Perhaps they would use a managed fund which invested in international bonds & stocks. Perhaps they would use shares in the bank itself. The outcome that became the most popular would likely be the outcome that provided the lowest level of inflation.

  29. Mark,

    If commodities fall in a general sence (such as they have recently) then gold almost always falls in tandem (such as it has recently). As such our dollar would still move down in such a scenerio.

    We do have price floors on wages. We shouldn’t but we do. However this is only relevant if a gold standard caused deflation. There is almost zero evidence (valid evidence) that it would cause anything other than possibly the mildest of deflations. If it did cause 1% deflation per annum growth in real wages over time would offset the negative impact of price floors. And in any case we shouldn’t use one bad policy (price floors) to prop up another bad policy (interest rate fixing).

    I’m both amused and disappointed that you think devaluation of the national unit of account is an appropriate response to an internal downturn. This presumes somewhat that monetary factors are what cause recessions. For recessions caused by severe deflation this is true but such events are quite rare (even rarer on a well run gold standard). For recessions caused by malinvestment this is true but interest rate fixing and devaluation are the guilty parties not our saviours. For recessions caused by a supply shock (eg crop failure) devaluation won’t bring the crop back. We would want to import food temporarily using savings and a devaluation wouldn’t be a good thing.

    You also seem to suggest that we need perfect free trade before we can reform monetary affairs. This is unnecessary in my book. Trade is already quite open and was much more closed during the early years of Bretton Woods era with the global repurcussions of Smoot Hawley still in play.

    The fault in your logic stem I believe from some false notion that a gold standard elliminates trade imbalances. If it did I would agree with your concerns about adjustment, however a gold standard does not elliminate trade imbalances and we should not wish for it to do so.

    John – if we ran the government and we increased the base money supply above some baseline by 50% every Tuesday and decreased it below that baseline by 50% every Saturday we could still get low and stable inflation as measured by the CPI (likewise if foreigners placed oscillating demands on our currency and we stuck to the baseline). However it would be like a wrecking ball to the economy. Even more so if the jolts were more random.Low and stable CPI inflation is a necessary condition for monetary success but it is not sufficient. The CPI is a poor indicator of good policy although it will clearly reveal very bad policy. As such I think the monetary system you advocate is simply too lacking in detail to be called a system. You are merely articulating the ends without any commitment to the means. A gold standard entails a regular adjustment of the base money supply in a manner that is consistent with low inflation and as such it fully satisfies the requirement that you set. So no argument but no gold star either.

  30. p.s. John – whilst it is good to see that you have taken on board the gold production adjustment process under an international gold standard you seem to have missed the fact that under a unilateral gold standard there is a gold import / export adjustment process. If gold imports are inflationary then they will become unprofitable relative to food imports and wine imports and TV imports. Golds virtue is that you can’t eat it or burn it or do anything particularily useful with it except in rare instances.

    This is quite separate from the false idea that gold standards will or should elliminate trade imbalances. The don’t and shouldn’t.

  31. p.p.s. Mark for fun you might point to the last economic contraction Australia suffered due to purely domestic factors and explain why devaluation of the aussie was or would have been helpful.

  32. Terje,

    You are quite correct that our dollar and commodities fall in tandem. That’s the hedge. If you are an exporter you get more Australian dollars from a lower sale price.

    I’d say that is a very low price to pay for adjustment.

    The gold standard caused inflations and deflations. That’s how the adjustment system under the gold standard works – internal price adjustments – as nations have more or less gold specie due to inflows or outflows. With a regulated labour market, unemployment becomes a function of the balance of payments.

    Yes interest rate manipulation does engender business cycles. Simply because you have autonomous monetary policy and a floating external mechanism does not necessarily mean that you are going to misprice credit. This is more a function of inflationary bias and other mispricings. How is transferring the adjustment to internal balances going to create a monetary policy that correctly prices the cost of capital?

    You are also wrong about what I think about the gold standard. The balances need to be channelled through to an adjustment process, and it simply is not appropriate for Australia individually nor with our current labour market regulations.

    The volatility of monetary policy can be controlled by choosing long term targets and attempting to get time consistent policy. Any system of a fixed exchange rate can also suffer the same problems you refer to. How would a fixed exchange rate system deal with this? By writing IOUs for a week?

    I really don’t know what you are talking about sometimes Terje. Where did I imply we need free trade before we have a gold standard? Tht gold standard worked perfectly well with moderate protectionism You misunderstood the point. Your argument that objecting to a unilateral gold standard is not the same as objecting to unilateral trade liberalisation.

    That’s a hell of an opportunity cost to pay so we can have lower transactions costs for external trade and investment.

    “This presumes monetary factors cause recessions…” They do. But the money also drives the external balances. Yiu can’t bring the crop back…but you need to revalue your economy in terms of the crop being lost.

    Let’s assume international factors cause our recessions – the adjustment process for gold is to have a fixed external price and reprice internally for all goods. I do not see the advantages of this when exports and imports only both roughly equal 20% of GDP. The process for a floating rate is that the rate changes on arbitrage opportunities which reduces the impact from the financial markets but reflects a revaluation of the overseas real economy.

    If the causes are purely internal, then the adjustment process for gold is deflationary. This seems fine in so far as there needs to be revaluation of assets. It is not such a good scenario with rigid labour markets. The adjustment process with a floating rate limits the impact on labour markets but amplifies the balance of trade pattern. Here the savings rate increases in both scenarios, which is needed for future sustainable growth.

    For Australia, under our current circumstances, the gold standard does marginally less well in responding to an internally caused recession but does poorly in transmitting a foreign recession to us.

  33. Terje — the approach I mentioned is effectively the one that is already used, except using money base as the instrument instead of interest rates. I understand that CPI is an imperfect trigger, but it’s better than a slap in the face with a wet fish.

    I don’t understand your response to my point about a small country being subject to a gold price which varies for reasons unrelated to inflation.

    As I understand it, there is no need to actually import/export gold in your system. The government just needs to control the supply of money so that the currency always has the same value as gold. So gold doesn’t need to enter the country to cause inflation/deflation… it just needs to change price. And that happens all the time.

    As a side note to your discussion with Mark… I don’t think expansionary monetary policy now constitutes devaluing the currency. The credit multiplier has decreased, which means that broad money supply has decrease. This requires an offsetting increase in base money.

  34. John is right. Currency devaluations are relative. A strong currency may just be the least inflationary.

    My choice is imperfect but it suits Australia: proxying market growth of money, then having international markets balance. We have low inflation and internal price stability. We have a premium on exports and increased import and outward investment purchasing power.

    (My first choice is of course privatisation, but strict monetarism and a clean float are the 2nd best).

    Terje, my point is this simple: there is no general best monetary regime for any country besides everyone using the same system or privatisation. The US, EU, China and Swiss could go onto the gold standard. I think these countries should seriously explore the possibility. Japan is fiscally a basket case. I agree with John and JC, even though I’ve barely mentioned it – in the absence of international coordination, we would need to follow the leader if we wanted a gold standard.

    Essentially, if you don’t privatise, you must decide if a peg, fix, gold, floating rate, dollarisation etc is best for you. Different countries will often have different best policies in the absence of international coordination.

  35. Mark – in comment 33 you said that in the absence of global free trade each nation must choose a different monetary regime. It was that comment that I took as saying that trade needs to be more perfect before we can do something like a gold standard.

    I want a beer with you two some time. This will take a few hours. Possibly longer at this rate.

  36. Well I stuffed up royally. I meant in the absence of free banking or global coordination (e.g global gold standard).

    If Australia wants a unilateral gold standard, we better do it after the larger economies do it.

    Sorry. You should have picked I stuffed up since I contradicted 33. at least once.

    Sorry.

  37. The only candidate of choice for 2012 is Barack Obama. He is turning around the economy and Bush’s mistakes and making the tough decisions to help us move forward. Whoever this Gary Johnson guy is, he needs to go back to smoking the funny stuff if he thinks drugs will ever be legal here.

  38. Berg:

    What sorta site are you running there, dude. It’s a pretty groveling site to a politician. He isn’t god. Grow up.

  39. Berg: If you think Obama is turning around the economy, you are off your rocker. Obama is making tough decisions ?? Like what, spending the taxpayers money haphazardly ??

    Your messianic thinking is what’s wrong with the country.

  40. I have one problem with his whole post. It tries to say he is good and then almost paints him in a bad light…it emphasizes on the drugs that they say he did, which he didn’t. From what I have read about him he his a health nut who abstains from alcohol, corn syrup and other things, is an avid biker and climbs mount everest. I doubt he has even tried them, and he is NOT the avid user this article paints him to b…Also, so what if he comes of a little geeky. we need someone with brains in the office…someone with brains and reason (I think barry obama is smart but is too intrenched in ideology).

    The point is look at his record. He was governor for 8 years. I know bush had his father but he was only governor for about 5. Both were the kinds of guys america could relate to. the draw with bush is that you would wanna have a beer with him…I would say the same thing about Gary.

    He is also a common man and a DC outsider. These are 2 things that appeal to people, especially now in this political turmoil. there are people in both parties that are fed up with how things are run. A guy like johnson who started off as a small business owner is the type of common man that can appeal to america.

    His record as governor speaks for itself. He is very opinionated but in a good way. He doesn’t bend his reason and beliefs for anybody. He vetoed 750 bills in a very blue state…A lot of times, people vote relatively on party lines and there are bills that come to the desk (especially as a governor) that are pointless to pass and will just use up money. The government is there to pass as FEW bills as possible not as MANY. The fact that he got overridden only twice out of 750 shows that these people were passing the bills for no reason and when they had a second look, thought otherwise. Many presidents just pass a bill if it “looks good” and that is how we get a lot of pointless/stupid/wrong national laws.

    Johnson is the type of guy that appeals to both sides. He is not the religious right, although he can still get their vote on the national scale. He does not like pro life but is more for states rights. However, as a governor he DID veto man abortion bills…most of them for funding…I am assuming (using his seven rules and using my reason) that it was more for the fact that he thought it wasn’t the job of the state to fund for abortion, which makes sense…The fact is, he is moderate on these issues and on the national scale can draw over many democrats b/c he is not trying to overturn Roe v. Wade and not trying to make an anti-gay marriage amendment in the constitution.

    He also was against the war from the start which won’t please some people on the right but some of them these days are for a withdrawal too. With this, he can truly draw over many of the moderates that will be disheartened by barry…many already are. There is discontent in both parties because of the far left and far right. people are drifting more towards a balance in the middle and that is where gary will be.

    I can’t believe i almost forgot to mention how he is extremely fiscally conservative and NEVER raised taxes…Even some democrats like the sound of that.

  41. He now has a website up with videos of him talking on various issues including on abortion and on drugs. I’ll post the link once I find it again.

    I’m dreaming of a republican run off between Ron Paul and Gary Johnson.

  42. Gary Johnson should be the nomination, but he won’t have a chance of ever getting it

    The Virginia and Minn governors are the big shorts I think.

    Johnson has that authentic quality that could hit the public though, as he seems totally unscripted.

  43. I agree he should be the nomination. He is not right wing or left wing and with many ppl being disillusioned with both, a man who is somewhat liberal but still a republican can unite the country…

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