Gingrich Goes for Gold

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The New York Sun

The call by Newt Gingrich for the creation of a commission on gold to examine how America can return to a system of hard money is a step forward for him and the Republican Party as we go into the most formative months of the campaign. The former speaker issued his call at Columbia, South Carolina, at a policy forum on American global leadership. He used the phrase “hard money” to speak of a gold standard of the kind the Founders of America had in mind. It would mean, he said, “you can’t just hide from your problems. You’ve got to solve them.”

Mr. Gingrich’s call is the most clarion yet among a Republican field that has been dancing around this issue since the start of the campaign. We’re delighted — thrilled — to see it, because we have been stressing the centrality of the monetary issue since before this campaign began. Let us say, though, that our country is way past the point where we need another commission. A commission, as President Reagan learned in 1981, is a recipe for burying an idea, not putting it into law. It will be important for Mr. Gingrich to get past the commission idea in a hurry.

The fact is that we know how to get back to a gold standard. This has just been outlined by Lewis Lehrman in a new book, issued in October, on exactly this point. It is called “The True Gold Standard: A Monetary Reform Plan Without Official Reserve Currencies — How We Get From Here To There.” Mr. Lehrman, a businessman turned scholar, is not just any gadfly. He was a member of the United States Gold Commission set up under President Reagan in 1981. The commission, in a historic blunder, recommended sticking with the old system of fiat paper money.

It’s most noteworthy achievement, still widely discussed today, was the minority report, which was written by two of the commission members — Mr. Lehrman and a relatively new member of Congress named Ron Paul. Their minority report, later issued as a book called “The Case for Gold,” recommended a return to hard money. But it was swept aside in the tumult of the early Reagan years. That was a time when the supply-side measures of Mr. Reagan were combining with the tight-money policies of a Federal Reserve headed by Paul Volcker to bring us back from the precipice. We had been teetering on the brink because of the inflation unleashed by Lyndon Johnson’s campaign of guns and butter and President Nixon’s abandonment of Bretton Woods.

So we don’t need another confounded commission. We need a political campaign that knows where it’s going. It sounds to us like Mr. Gingrich understands these principles; he’s well acquainted with Mr. Lehrman’s work, as he made clear in an interview with Lawrence Kudlow in December, where he also praised Steve Forbes, another honest money advocate. Congressman Paul knows the issue cold. Governor Perry has also indicated that he comprehends the issue. Our own estimate is that Governor Romney, who blundered at the beginning by telling Mr. Kudlow that he would not challenge Chairman Bernanke’s quantitative easing, is educable; he’s already indicated he wouldn’t reappoint the chairman. We’d prefer the Republican Party Platform Committee to another government commission.

The thing that needs to be done is go get the best of the Republican candidates and the platform writers together with Mr. Lehrman and his brain trust, which includes a number of figures who understand this issue down to the ground. Among them are James Grant of the Interest Rate Observer and policy experts already grouped under the umbrella of The Gold Standard Now. The ideal outcome, in the view of this newspaper, would be a platform plank that could be carried into the general election by whoever wins the Republican nomination. If that candidate wins the election, the platform plank becomes a genuine mandate for restoring America to the era of sound money under the president and Congress that will be in office for the 100tth anniversary of the founding of the Fed.

The New York Sun

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