This week, a fantastic editorial appeared in the Wall Street Journal that has sparked a very important conversation. In the article, the paper’s editorial board encourages President Trump to use monetary reform to address Chinese currency devaluation. The WSJ wrote: Mr. Trump’s trade policies are also becoming a currency problem. Faced with the threat of U.S. tariffs on some $500 billion of its exports, China seems to be letting its currency depreciate to compensate. The yuan traded at 6.27 to the U.S. dollar on April 18 but fell to 6.77 on Friday. That should help the competitiveness of Chinese exports in
US News and World Report‘s Andrew Soergel reports that “With White House in Sight, Trump, Clinton Plan Fed Renovations: No matter who wins the election, times are likely changing at America’s central bank.” “The Fed” really is a synecdoche for monetary policy. Monetary policy used to be, off and on, a significant factor of presidential campaigns. In this election cycle, the monetary policy issue has only arisen occasionally and has not become a major issue of contention. Pity. It really deserves to be front and center. What is widely regarded as the most striking speech in presidential campaign history was
Whoever wins the presidency there is a lurking issue, the most underappreciated issue in politics. Getting it wrong destroyed the economy (and contributed to ending the presidencies) of Ford and Carter and tarnished the records of George W. Bush and Barack Obama. Reagan and Clinton got it right and went on to handsome re-election. The political and economic elites are curiously blind to it. An iconic cartoon by Benita Epstein (view it at benitaepstein.com) shows a myopic middle-aged man gazing into a refrigerator full of nothing but butter. It’s captioned “Hon, where’s the butter?” It is the defining image of “Male
Who will conjure the American Dream back for us? Politics is part prestidigitation, part reality. A great magician distracts her audience’s attention while producing the payoff. Abracadabra! Want to see how it’s done? Focus on the hidden hand. In this case, the United States Senate. […] Money matters. Bad money “engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” Bad money “is noticed by only a few very thoughtful people … gradually overthrows governments, and in a hidden insidious way.”
After meeting with progressive lobbyists at the Federal Reserve’s annual Jackson Hole retreat, Fed policymakers declared on Friday that the Fed needed new “tools” to manage the economy, including the ability to buy non-government-backed assets like corporate debt, which would add to the Fed’s historically gargantuan $4.5 trillion balance sheet. On Sunday, The Wall Street Journal editorial board responded by calling the Fed a “political body” and, for the first time, endorsing the Centennial Monetary Commission Act: One place for Congress to start would be to pass Rep. Kevin Brady’s idea for a monetary commission to consider the role and
“Houston, we’ve had a problem here.” With those low-key words, command module pilot Jack Swigert of Apollo 13 revealed that, in the later recollection of mission commander James A. Lovell, its “oxygen tank No. 2 blew up, causing No. 1 tank also to fail. We came to the slow conclusion that our normal supply of electricity, light, and water was lost, and we were about 200,000 miles from Earth.” NASA’s heroic and successful effort to return the crew safely home is part of national lore and history. “Washington, we’ve had a problem here,” we, the voters, are saying, far more emphatically.
Kate Davidson in The Wall Street Journal recently took note of a GOP 2016 plank that had been largely overlooked in all the focus on the social issues in the Platform Committee: “GOP Platform Includes Proposal to Study Return to Gold Standard.” The Republican Party’s 2016 platform calls for a commission to explore the feasibility of effectively returning the U.S. to a gold standard. The idea has been popular with parts of the GOP for years, but hasn’t gone very far. The new platform, approved at the party’s convention Monday, echoes similar language in the 2012 GOP platform by calling for
A report by Michelle Jamrisko in Bloomberg News on May 17th, headlined “Make America Gold Again: Calls for Everyone’s Favorite Standard Are Back,” suggests that the headline may have outrun its pass coverage. The gold standard is by no means “everyone’s” favorite standard. It has many critics. And yet, giving due deference to an element of dramatic license, this report makes several very significant points, scooping the rest of the mainstream media. The first key points are that, in the reported words of Jesse Hurwitz, a U.S. economist at Barclays Capital in New York — who considers the gold standard a bad