Pawlenty’s Progress

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

The best part of Governor Pawlenty’s speech framing his economic platform this week will, we predict, prove to be his call for a strong dollar. There has been a good deal of admiration, all of it apt, expressed for the speech generally, particularly the coherence of his pro-growth strategy of tax cuts and deregulation. The Wall Street noted it in an editorial called “Pawlenty’s Growth Marker,” and Lawrence Kudlow’s column expressed a similar view. What we liked in particular was the way the former governor of Minnesota marked that, as he put it, “even if we are successful in changing the way Washington taxes, spends, and regulates . . . many of the gains we’d realize could be lost by the continued debasement of the dollar,” which he blames on “the loose-money policies of the Fed.”

This is not the first time a prominent Republican has warned of the errors of the Federal Reserve. Governor Palin was the first to break out of the GOP pack with a pointed demarche aimed at the Chairman Bernanke’s campaign of quantitative easing. But she is not a declared candidate, if she is a candidate at all. Mr. Pawlenty brought together themes he’s been mentioning for months and put the matter with clarity, noting that a “strong dollar undergirds all that we do for economic growth” and warning that inflation “cruelly undermines the life savings and life prospects of every American.” Said he: “If we want to give taxpayers — retirees — investors consumers — and entrepreneurs a better deal — we have to maintain a strong dollar.  No more quantitative easing.  No more monetizing debt.  No more printing money with reckless abandon.”

Mr. Pawlenty called for the end of to the dual mandate for the Fed, requiring the central bank to manage the dollar so as to maintain not only stable prices but also maximum employment. It was notable not only because it was correct but because it would reverse a demarche handed up by — and eventually in honor of — the greatest of the liberal politicians from his own state, Vice President Humphrey. We have long since reached the point where it is clear that the law that gave the Fed the dual mandate has produced neither a stable dollar nor full employment. Mr. Pawlenty pointed out that the president and the Congress have their own reasons for maximizing employment, leaving the Fed to focus “like a laser” on inflation. How fitting that the planking to end Humphrey Hawkins should be handed up to the platform-carpenters of the Republican party by the late vice president’s fellow Minnesotan.

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Only a few months ago we were worried that no major Republican other than Congressman Ron Paul would try to “brand” as his or her own the issue of honest money, as the point was put by the editor of the Sun in an column at Amazingly, Governor Romney has gone so far as to swing behind Mr. Bernanke and the policy of quantitative easing, refusing to back off even under pointed questioning by Lawrence Kudlow. But now Mr. Pawlenty and Mrs. Palin are out clearly on the issue, and in the weekend interview of the Wall Street Journal, Michele Bachmann, who is preparing her own run for the presidency, said that when she goes to the beach the author she likes to take with her is no less an advocate of classical liberalism and sound money than Ludwig von Mises. A few more such candidates and the GOP will have real depth of field on this issue and be able to support a solid plank from which to campaign for honest money against an administration that has brought this country to the brink of default.

The New York Sun

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