Kenneth Rogoff spoke, and the Bitcoin hornet’s nest stirred.
When the renowned Harvard economist and former chief economist at the IMF publicly admitted he was mistaken about Bitcoin, he didn’t do it gracefully; rather, he doubled down. The issue wasn’t that his 2018 prediction of Bitcoin’s imminent collapse was incorrect; it was
- Trump’s crypto regulation was helpful, contrary to the needed crackdown
- Bitcoin was shockingly adopted and used by criminals, and
- Trump “brazenly holds hundreds of millions … of dollars in cryptocurrencies seemingly without consequence.”
Can you believe the willful ignorance? Scooby-Doo called, wanting his villains back (“I would have gotten away with it, too, if it weren’t for you meddling kids”). There’s no other value to this thing, no additional use case for censorship resistance, no savings option outside shady banks, no instant global payments over Lightning?
Even in that 2018 CNBC interview, Rogoff stated that regulation would lead to lower prices, not a spur for higher ones, as he now suggests. This feels like a salty rationalization rather than a serious analysis.
Slay Your Heroes, Always
Rogoff’s remarkable book, This Time Is Different: Eight Centuries of Financial Folly, and particularly the freely available data supporting the research across numerous countries over hundreds of years, was invaluable during my university years. I learned so much from him.
When I finally met Rogoff around 2018, it was a total “kill your idols” moment. He had just released his bewilderingly misguided book The Curse of Cash — arguing we should ban cash because of criminals… and because cash complicates monetary policy transmission and makes negative interest rates harder to apply. I attempted to explain the merits of competitive note issuance and monetary freedom. To my astonishment, he was spouting nonsense about free banking and misconceptions about U.S. banking history, not to mention Canada, Scotland, or Sweden, of which he seemed entirely unaware.
The moment really resonated with me. I was young and not yet that disillusioned with elite knowledge and the esteemed academic establishment. But I was left speechless that a famous Harvard professor didn’t know better… what, the skills and cognitive faculties that brought you here have simply vanished?
Around this time, I began saying,
The most important thing I learned at Oxford was that you can have a PhD and still be an idiot.
It was a wake-up call of astronaut-meme proportions: I was in the big leagues, the prestigious halls of knowledge, engaging with the top minds, conversing with the most esteemed economists and economic historians in my field… and it turned out they were unfamiliar with many crucial topics. I recall a night in Oxford when I had to explain to a well-respected historian how bank loans become deposits in another institution, effectively increasing the (broad) money supply. Textbook material.
Elite university professors can be clueless…? Absolutely.
Bitcoin derangement syndrome, or BDS, is a significant, troubling phenomenon that has taken many brilliant minds from us far too soon. Numerous fiat elites became so captivated by their own egos and entrenched in the status quo that, by the way, it has greatly benefited them. They often fail to recognize the errors in their previous beliefs.
The right intellectual response when reality deviates from your expectations is to re-evaluate your model. Perhaps you miscalculated?
A rational reaction to Bitcoin’s price increasing 13x (+1,220%) in the seven years since you boldly proclaimed its imminent demise is to reconsider your stance. (For context: U.S. official CPI: +29%; U.S. median earnings: +38%; S&P500: +146%.)
Perhaps I overlooked something, one ought to question. Perhaps there’s something here that I failed to perceive. Maybe, just maybe, this seemingly worthless, speculative, technobabble disaster holds genuine value?
I have lost nearly all respect for conventional academics; there is a clear need for new institutions of (higher) education. Bitcoin is open to anyone, but not everyone, and individuals acquire bitcoin at the price they deserve.
For all I care, Rogoff can take his place alongside Elizabeth Warren at the back of the line.
