The most astounding feature of the political fray as the 2012 election comes into view is that not a single Republican other than Congressman Ron Paul is stepping forward to brand as his or her own the issue of honest money. The whole party is into the negotiation with the president over the budget, and the underlying issue--the failure of our fiat currency--is up for grabs.
It is true that there's plenty of blame to go around on the dollar. It had a value of 265th of an ounce of gold on the day that George W. Bush acceded to the presidency and was worth less than an 853rd of an ounce of gold on the day he left office. The New York Sun, which supported Mr. Bush in 2000 and 2004 elections, issued in December of 2005 an editorial called "The Bush Dollar," warning of the collapse of the greenback. It had just sunk below a 500th of an ounce of gold.
Today, of course, it is worth barely more than 1,500th of an ounce of gold. The giddiness of the plunge of the dollar really started to be felt in the years after the Democrats acceded to the leadership of the House. At the time the Sun called for renaming the dollar "The Pelosi." The collapse has been so dramatic that the Europeans, the United Nations and even the Chinese communists are talking about the need to create a new international reserve currency. Yet not a single Republican has stepped onto the national stage and declared a run for the presidency on a platform containing the strong dollar as a major plank.
Now that the Republicans are back in control of the House they are in a perfect position to press this issue. Congressman Paul has been on the issue at least since the early 1980s, when he, with Lewis Lehrman, issued his dissent to the final report of the United States Gold Commission. The commission had been established in 1981, a decade after the collapse of the Bretton Woods system. It ultimately endorsed a continuation of fiat money. It's hard to think of a longer, more faithful adherence to constitutional principle than that which has been maintained by the physician turned legislator in the 30 years since. But Dr. Paul has yet to announce his run for president.
Neither has Sarah Palin. The alert Alaskan--as the Sun likes to call her--has made it clear she's watching the issue. In November, as the Group of 20 was preparing for its doleful meeting at Seoul, she leaked to National Review a speech she was about to make at Phoenix, confronting Chairman Bernanke over his program of quantitative easing. The demarche ignited quite a tumult for a few days (and an editorial salute from The Wall Street Journal), but Palin, too has hung back from a campaign.
A number of other Republican governors--current ones like Mitch Daniels and Tim Pawlenty and former ones, like Mitt Romney--would seem to adhere to the principles of political economy that would put a premium on sound money. But none is preparing to make campaign on sound money. Nor is Paul Ryan. He clearly sees the issue out there. It was he who elicited from Mr. Bernanke the famous reply, "I don't fully understand the movements in the gold price." But Mr. Ryan is focused on the details of the budget.
The conservative intelligentsia is waiting for a champion on the issue. The Wall Street Journal editorial page has been pressing the issue in op-ed pieces and editorials. So has Forbes. Lawrence Kudlow of CNBC has been calling for a return to "King Dollar." James Grant is illuminating the issue in his Interest Rate Observer (and The New York Times).
Even a group of our greatest federal judges is asking the Supreme Court to hear their plea for a ruling that Congress must reinstate the automatic inflation adjustment in their salaries that the legislature had suspended--a suspension that was, the judges contend, in violation of the constitutional prohibition of diminishing the pay of a judge while he continues in office.
And then there are the states. The other week Utah became the first to take advantage of an opening left to the states by Article One, Section 10 of the Constitution to make gold and silver coins legal tender. The Constitution prohibits states from coining their own money and/or making anything other than gold or silver coins a tender in payment of debts. Now, spurred by the American Principles Project, at least a dozen states are at least tentatively exploring doing just that.
In Utah's case, what it has done is not only make gold and silver coins legal tender but remove the state capital gains tax on any gain persons in Utah might get from holding gold and silver coins. There are those who set down the gesture as irrelevant and even flaky. But if several other states actually pass laws similar to what Utah has done it will add up to a remarkable vote of no confidence in the system that has been creating the money that we call dollars.
Could value start to return to the dollar without any candidate seizing the issue? No doubt it's possible. The bad-cop, good-cop team of Paul Volcker and Ronald Reagan used the combination of the chairman's tight money and the president's supply-side fiscal and regulatory reforms to achieve just such a turnaround during the 1980s. But can one expect the same from a combination of Chairman Bernanke and President Obama?
The fact is that the ground is so ripe for a candidate to seize the lead on monetary reform that one has to wonder why no one is stepping up. Is there what might be called the William Jennings Bryan effect? In 1896 he made the most famous attempt to run for the presidency on a monetary campaign. It produced his speech against crucifying mankind on a cross of gold. He lost. But then his campaign--a call for debasing the dollar--was the opposite of the opportunity that is beckoning the Republicans today, which is a campaign for a return to sound money. So let it be a lesson.
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