The Republicans have put the gold standard (or at least a commission to study the idea) back in their party’s platform.

Paul Krugman writes about why this is nuts:

There is a remarkably widespread view that at least gold has had stable purchasing power. But nothing could be further from the truth…

So if we’d had a gold standard operating in this crisis, there would have been powerful deflationary forces at work; not exactly what the doctor ordered.

Now, the gold bugs will no doubt reply that under a gold standard big bubbles couldn’t happen, and therefore there wouldn’t be major financial crises. And it’s true: under the gold standard America had no major financial panics other than in 1873, 1884, 1890, 1893, 1907, 1930, 1931, 1932, and 1933. Oh, wait.

Mitt Romney surely knows this, at least.

— Naked Capitalism’s Yves Smith takes down that too big to fail apology op-ed in The New York Times by former JPMorgan Chase chairman William B. Harrison Jr.

Where Harrison writes this…

The first fallacy is that the emergence of large, universal banks — combining commercial banking with investment banking — was an artificial or unnatural development. In 1990, there were 15,000 banks in the United States; this fragmented market meant that banks could not achieve economies of scale or easily serve clients on a national or global level.

Smith says:

Guess what, sport fans? Bigger banks exhibit DISECONOMIES of scale. Every study of banking ever done show that banks have a slightly positive cost curve once a certain size threshold is passed. That means that costs rise as banks get bigger. One study found the break point to be $100 million in assets, most find it to be between $1 and $5 billion in assets; I’ve seen ones that put it at $10 billion. The sort of bank Harrison is defending is vastly above that size level; JP Morgan at year end 2011 had $2.3 trillion in assets…

As for “serving clients on a global scale,” big companies have long had numerous banking relationships, and take a “horses for courses” approach. The idea, say, that size would give JP Morgan an advantage in doing a merger in France is nuts. Major corporations typically make sure to have relationships with local banks in major countries in which they do business. While the major UK and US banks might snag some top local graduates, the native institutions are going to have a much bigger network of local contacts and expertise.

— The Atlantic’s Matthew O’Brien fires back at Niall Ferguson over his Newsweek mess:

The problem isn’t Ferguson’s conclusion, but how Ferguson reaches his conclusion. He either presents inaccurate facts or presents facts inaccurately. The result is a tendentious mess that just maintains a patina of factuality — all, of course, so Ferguson can create plausible deniability about his own dishonesty…

Is this nit-picking? Maybe. Ferguson gets some facts wrong. Ferguson gets some facts right, but frames them incompletely. Why the outrage? Because he’s treating facts as low-grade and cheap materials that are meant to be bent, spliced and morphed for the purpose of building a sensational polemic. Even more outrageous is that his bosses didn’t mind enough to force him to make an honest argument, or even profess embarrassment when its dishonesty came to light.

Let’s try a counterfactual. Say Ferguson hadn’t made his big errors about Obamacare. Then his smaller errors of omission would not seem quite so serious — or deliberate. But Ferguson did make his big errors. And he defends these omissions with more elisions. It makes it impossible not to read his entire piece as an effort to deceive.