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1/n As requested, the TLDR. There are many complaints about the ability of the US govt (via Fed and/or fiscal) to “debase” the dollar and bailout corporate interests. This is a complaint about the choice of how to use this power, but the crypto solutions that supposedly https://twitter.com/profplum99/status/1343043910944243713
2/n prevent the ability to debase are fundamentally flawed. Gold-backed and other “hard” money systems were designed to attract users to nascent systems, but WJBryan was right about the crucifixion that occurs when the backing is confused for the social good of a standard of
3/n account. A flexible currency allows forgiveness — a crucial ingredient in risk taking. The 17th-19th century was a uniquely fruitful period in human social progress as the opening of the “new” world created a legitimate check on the power of the elite to permanently impair
4/n an individual who tried and failed. Horace Greeley’s “Go West” was augmented by the introduction of personal bankruptcy and limited liability. As the ability to emigrate deteriorated, the power of the totalitarian state re-emerged and the 20th century began the process of
5/n rolling back these risk encouraging innovations and the 21st century has seen these restrictions blossom under a narrative of “moral hazard” and “small government”. As unregulated private players step in, facilitated by capture of what little true regulation exists, we have
6/n increasingly ceded control to private actors undercutting the costs of regulated players (eg Uber in transport, AirBnB in lodging, Starbucks in payment, Vanguard in pensions) with the objective of becoming “too big to fail” (some might refer to it as Zero to One) and
7/n encouraging the “privatization of gains and socialization of losses.” Crypto, and especially “stable coins” are simply the most extreme version of this movement predicated on a fundamental misunderstanding of the difference between a system with public participation and
8/8 a system designed to protect and encourage a social contract that protects risk-taking citizens from the depredations of the most powerful in our society.
