This is an historical occurrence that too few people today remember or were educated about. Rather than continue to talk about this based on my own recollections, I decided to search for a telling of the story on the internet. The Federal Reserve History web site has this article Nixon Ends Convertibility of US Dollars to Gold and Announces Wage/Price Controls.
President Richard Nixon’s actions in 1971 to end dollar convertibility to gold and implement wage/price controls were intended to address the international dilemma of a looming gold run and the domestic problem of inflation. The new economic policy marked the beginning of the end of the Bretton Woods international monetary system and temporarily halted inflation.
This history is key to understanding our current fiat money system that is described as the USA being sovereign in its own currency. I doubt that economists at the time this action was take would have had a full appreciation of all the ramifications of this change. However, after more than 55 years of living with this situation, some open minded economists are starting to come to grips with what this all means.
There are at least two web sites that I regularly follow to try to keep abreast of recent research and thinking. They are New Economic Perspectives and Naked Capitalism. Some other web sites are Levy Economics Institute of Bard College, and The Institute For New Economic Thinking.
Economists that I used to think were Liberals and Progressives, Paul Krugman, e.g., seem to be highly resistant to understanding how different the economic world is from when they received their training in the subject.
According to the Wikipedia biographic article on Paul Krugman:
Krugman earned his B.A. summa cum laude in economics from Yale University in 1974 and his PhD in economics from the Massachusetts Institute of Technology (MIT) in 1977 with a thesis titled Essays on flexible exchange rates.
I wonder if this timing of his education is what has him boxed in to his current refusal to understand how things have changed. Having finished is thesis in 1977, there were only 6 years of experience with the new monetary system for him to study. I am sure this put him on the forefront at the time. Since then, he seems to have stagnated, perhaps with his over egotistical view of his own infallibility.
Not being nearly as smart as Paul Krugman, I find it a little easier to shed my previous views in light of new information. Of course, it is not being smart that is the problem. It may be, as I have conjectured, that being too smug is the problem. By the way, Paul Krugman is one of the eminent advisors and defendants of Hillary Clinton. Economists from the newer camp, Stephanie Kelton and William K. Black are Bernie Sanders’ advisors. Perhaps the fact that Bernie Sanders is older than Hillary Clinton and Paul Krugman, but has chosen advisors that are younger than those two may explain why he can understand the modern world better.