This year’s Republican Party Platform apparently will include a call for a commission to study the possibility of reestablishing the tie between the dollar and gold. This follows a bill passed by the Republican majority in the House to establish a similar commission.
Congressman Ron Paul, and his libertarian-minded supporters, have long-worked to make the once-fringe idea of returning to gold-as-money a legitimate part of the national debate on monetary policy. However, they had trouble getting traction for the idea until Obamanomics began to debase the dollar at a rate that began to frighten even Capitol Hill’s business as usual GOP leadership.
The idea of a return to the gold standard is also getting serious conservative intellectual support through the leadership of think tanks, such as the American Principles Project, whose chairman, Sean Fieler was recently quoted by business network CNBC as saying, “There is a growing recognition within the Republican party and in America more generally that we’re not going to be able to print our way to prosperity.”
Fieler’s advocacy of a return to sound money isn’t just a libertarian intellectual exercise. It is backed-up by such respected conservative economists and thinkers as Lewis E. Lehrman, senior partner of L.E. Lehrman & Co. and former member of President Reagan’s U.S. Gold Commission; Arthur Laffer, CEO of Laffer Associates and member of President Ronald Reagan’s Economic Advisory Board; Dr. Manuel Hinds, the former finance minister of El Salvador and recipient of the Manhattan Institute’s 2010 Hayek Prize for his co-authorship of the acclaimed work Money, Markets, and Sovereignty, and other distinguished conservative intellectuals and academics.
As CNBC noted, the idea of returning to the gold standard isn’t new to the Republican platform. The 1980 Reagan platform referred to the “restoration of a dependable monetary standard," while the 1984 platform said that “the gold standard may be a useful mechanism”. More recent platforms, however, did not mention it.
A commission would have no power except to make recommendations. What’s more, how the transition to a gold standard might be accomplished without disrupting the economy has yet to be determined, so we’re not going to go from a standing start to the gold standard, as Sean Fieler of the American Principles Project put it.
However, the idea of returning to the gold standard, or least establishing some sort of sound money standard, looks a lot less fringe today than it did a few years ago. From the beginning of the recession, President Obama and Federal Reserve Chairman Ben Bernanke have increased the money supply over 64 percent – by $3.4 trillion – simply by rolling the printing presses.