Governors Bush and Christie recently were commended at ThePulse, here and here, for their astute leadership in raising the issue of the Fed’s role in causing the dearth of job creation, median family income stagnation, and the lack of income mobility. There is a “killer app” by which this issue can be joined safely and powerfully.
There a healthy diversity of opinion within the GOP economic elites as to which “rule” the Fed should be following to optimize job creation and economic mobility for median income families. That said, there is unanimity on the right that the Fed should be following a rule. Some advocate for the “Taylor Rule,” others for “NGDP targeting,” and there is a significant support, including among public intellectuals such as Steve Forbes and George Gilder and academic economists such as Prof. Lawrence White, for the “Golden Rule.”
The presidential aspirants properly might consider it premature to take a position as to which rule is optimal. They understandably might be hesitant to dive into controversial matter of the gold standard. (That said, a 2012 poll by Rasmussen strongly suggests that the gold standard holds dramatic, and unexploited, voter appeal among GOP base voters — conservatives and Tea Party members, especially, but also moderate Republicans — and also among African-Americans and labor union members, showing its general election appeal.)
The most high-powered and safest way to bring into the debate “the question the liberals don’t want to discuss” — as termed in an editorial by the New York Sun — is to support the creation a monetary Commission. Such a body was called for in a widely-noted plank in the 2012 national GOP platform. It was endorsed in a unanimous resolution of the Republican National Committee. Legislation to enact such a Commission was introduced in the 113th Congress by Rep. Kevin Brady, prime sponsor in the House, and Sen. John Cornyn, prime sponsor in the Senate. It is a very well grounded proposition.
Monetary policy is a powerful force in the economy, for good or evil. That said, monetary policy can be somewhat arcane. It is sure to draw virulent attacks from the “monetary policy deniers” of the left. Hence the importance of a Commission to sort out contending claims before moving to proposing legislation. The Commission’s purpose will be to conduct an empirical study of the real world outcomes — especially in areas such as job creation and income mobility — of various Fed policies over its history.
The left, relying on “faith-based economics” (“the Fed can do no wrong”), is averse to constituting such a Commission. What are they afraid of? The left’s aversion is one more reason why Governors Bush and Christie — as well as other presidential aspirants — would do very well to champion the formation of just such a Commission. Meanwhile, all presidential contenders can unite around the American principle that “You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of cheap dollars.”
Ralph Benko, internationally published weekly columnist, co-author of The 21st Century Gold Standard, lead co-editor of the Gerald Malsbary translation from Latin to English of Copernicus’s Essay on Money, is American Principles in Action’s Senior Advisor, Economics.