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I know that talking about Herman Cain's economic thought is in a fundamental sense an oxymoron – and anyway it wouldn't matter for his role at the Fed, because he would do whatever a GOP president told him, and sabotage any Democrat. But still 1/
I was struck by his 2012 advocacy of a gold standard as a way to constrain politicians – and not just because Trump wants him precisely because he would do the opposite 2/ bloomberg.com/news/articles/… 
So first, if you imagine that a gold standard would prevent runaway government borrowing, you might want to notice that Greece -- which is the right's poster child for runaway public borrowing – ran up its debt while on the euro, effectively the same as being on gold 3/
Meanwhile, the idea that gold is a hedge against inflation, and thus that a gold standard would be stabilizing in some sense, runs against recent experience. Here's the real price of gold versus inflation 4/
Gold prices did hit one peak circa 1980, when inflation was high. But they revisited that peak in 2011, when inflation was low. This means, among other things, that a gold standard would have forced monetary tightening right at the depths of the Great Recession 5/
There is, it turns, out, a reason gold doesn't do what goldbugs think it does: the gold price isn't driven by inflation, but by real interest rates -- the return on alternative assets. These seemed low in the late 70s because unexpected inflation was eroding real returns 6/
But real rates after 2008 were low for a different reason – weak investment demand due to global deleveraging and premature fiscal austerity. These factors led to a weak economy, low inflation, and high gold prices; trying to stop gold from rising would have been a disaster 7/
OK, I'm probably wasting my time. And Cain quote uses language taken straight from Atlas Shrugged; and it's hardly news that the right is full of Ayn Rand fanboys. But anyway, always remember that goldbugs don't actually understand the gold standard 8/
