The Rubio Rule

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

It looks like Senator Marco Rubio is going to be among the first of the rising generation of Republican contenders to pick up the issue of the dollar. This was brought to our attention by futureofcapitalism.com. The issue of monetary policy, Ira Stoll notes, was “largely neglected” by Governor Romney, even though the Republican Platform, with its call for a new gold commission, gave him a terrific plank on which to stand. It was one of the most disappointing elements of Governor Romney’s campaign, and it’s nice to see some of the leading figures in the next generation starting to mark the monetary issue.

“Starting” is the operative word there. What Mr. Rubio said was that “[s]ound monetary policy” would “encourage middle class job creation.” That’s a point the American Principles Project has been made almost daily throughout the campaign just ended. The way Mr. Rubio put it is that the “arbitrary way in which interest rates and our currency are treated is yet another cause of unpredictability injected into our economy.” He wants the Federal Reserve to “publish and follow a clear monetary rule” to provide “greater stability about prices and what the value of the dollar will be over time.”

This puts Mr. Rubio at what we might call the slightly center left of the monetary debate. It is ground held by some our most important economists, such John Taylor, and the value of discipline and commitment was demonstrated during the Carter-Reagan transition to great effect by one of the heroes of the Fed, Paul Volcker. But our own instinct is that the campaign for monetary reform is going to take a great deal more than the kind of glancing references inside a longer speech, however admirable Mr. Rubio’s was. It’s going to have to be made the centerpiece of a long campaign the way taxes were made in the late 1970s and 1980s.

We are at a point in our economic crisis where we are going to need politicians who can also be great teachers and who can see this story in all its dimensions. This involves identifying the default that has occurred in the wake of the Bretton Woods system, and even the flaws in the Bretton Woods system itself. It involves discussing the error of fiat currencies, the constitutional breach and the moral breach that is made by a government that is underwriting its deficits with irredeemable money and issuing dollars without a definition in law. We would like to hear Mr. Rubio, and the other rising Republicans, talk to the country about the meaning of a dollar whose value has plunged to less than a 1,600th of an ounce of gold.

What the moment calls for is a politician who can merge the constitutional and economic clarity of a Ron Paul with the fiscal and foreign policy clarity of a Ronald Reagan or a Margaret Thatcher. Wouldn’t it be something were Paul Ryan, Marco Rubio, Jim DeMint, Rand Paul, Mike Lee, Sarah Palin, Ted Cruz, Bobby Jindal, Kelly Ayotte, Deb Fischer, and a few other of the leading new generation Republicans to come together to forge a monetary reform campaign that goes beyond the early signals of the kind that Mr. Rubio has just sounded. The issue is lying there for the harvesting, and it would be a tragedy if some other politician in another party figured it out before the GOP.


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