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It is difficult to remind the press of a panic that President Trump intends to appoint Stephen Moore and Herman Cain to the board of the Federal Reserve. The New York Times warns that the Fed could end up under the presidential "thumb". A "hideous specter," according to the Washington Post. "Sabotage" screams the Financial Times. They all regret the independence of the Fed.
We are tempted to say that all this solicitude for monetary policy warms the hulls of what remains of our heart. Yet the fact is that none of them – neither the two Times nor the Post Office – is worried about an independent monetary policy. If so, they had long been fighting for the gold standard. It is the classic and constitutional way to maintain a sound and honest monetary policy.
They do not worry about the qualifications of MM. Moore or Cain, although the democratic press has weakened. Mr. Moore participated in the debate on economic policy throughout his adult life and Mr. Cain spent years on the board of directors and chaired the Kansas City Fed. (According to a school of thought, we need greater representation of regional federates on the board of governors.)
The outcry sparked by these potential appointments is the sudden realization that the president might well include monetary policy in the list of campaign promises that he plans to keep. Remember? Paris climate agreement, agreement with Iran, Jerusalem embassy, tax cuts, full employment, army reconstruction, wall construction, conservative judges – can the Federal Reserve to be far behind?
This question erupted in the Republican primary debate in Boulder, Colorado, a year before the 2016 elections. As we have noted on several occasions, Mr. Trump addressed the monetary issue by focusing on the manipulation of the currency by Communist China. He called the gold standard "wonderful". The GOP platform has endorsed the strengthening of congressional oversight of the Fed and the creation of a commission to launch the reform.
So how can the Left intelligentsia feign surprise and indignation at the prospect of nominees like MM. Moore and Cain? Mr. Moore asked all the basic questions, including whether the Federal Reserve is really needed initially. He did not fully adopt a gold standard, but he also did not emerge against it. Mr. Cain has become a convinced supporter of honest money based on gold.
"Gold," quotes Cain in the Washington Post editorial, "it's kryptonite for politicians who spend a lot." economist from Princeton or Harvard could have formulated it in more technically correct language. Mr. Cain added that "gold was" for the government's moochers and looters what sunlight and garlic are for vampires ". Imagine this kind of conversation within the Free Market Committee.
We understand that the US Federal Reserve is not the right place to adopt monetary reform. The reconstruction of our monetary system exceeds the level of remuneration of the Fed. All the monetary powers granted in our Constitution have been granted to the Congress. However, whenever Congress has addressed the issue of reforming our monetary system, the Fed has risen in opposition, keeping the territory that was delegated to it.
It would therefore be a step forward for the Fed to have at least two less defensive governors in the reform efforts of our system. After all, over the past generation, the value of the dollar has dropped to 1,900 ounces of gold. At the beginning of President George W. Bush's term, he has still not exceeded one-fifth of his value. Maybe MM. Moore and Cain can do better.
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Image: Drawing of Elliott Banfield, courtesy of the artist.
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