Three Musketeers of Money

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The New York Sun

The addition of two more names to the list of possible Speakers of the House strikes us as an encouraging development for a Republican Party still in the process of preparing its platform for 2016. We were put in mind of the point by Ralph Benko’s column this morning at Forbes.com, where he suggests that in addition to Governor Romney’s running mate, Paul Ryan, currently chairman of Ways and Means, there are two other promising possibilities — Kevin Brady and Jeb Hensarling. The three of them are a particularly admirable field from which to choose a Speaker.

Substantively the point to be made about this is that they are three of the members of Congress who have perceived the possibility that at the bottom of our long economic travail of recent years lies fiat money. Call them the Three Musketeers of Money. We would not want to excuse the current administration (and recent congresses) from blame on taxes, trade, and regulatory issues. But we’re in the camp that sees the length of the recession and the inadequacy of our recovery as stemming from errors in monetary policy that beg for attention from Congress.

It was Mr. Ryan who asked one the most illuminating questions on this head. That was in June, 2010, when he forced the chairman of the Federal Reserve to confess to the House Budget Committee that he was doesn’t “fully understand” the gold price. His befuddlement was brought out by Mr. Ryan’s noting that the price of gold had just hit an “all time high.” Or, as we’d have put it, the value of the dollar had hit an all-time low. “What,” Mr. Ryan, “does that price signal tell you and what is your view of the long-term repercussions with respect to weak currency policies?”

Mr. Brady picked up the monetary theme during his chairmanship of the Joint Economic Committee. From that perch he’s been pressing for the creation of a Centennial Monetary Commission. The idea, which we’ve long since endorsed, is to take a strategic look at the Federal Reserve as it begins its second century of operations. The bill would set up a bi-partisan commission that would look at everything from the structure of the Federal Reserve’s governance to the dual mandate of prices and employment to the question of fiat money itself.

Lately Mr. Hensarling has started to bore in on this issue. He’s in the catbird seat because he has the House’s chief oversight of the Fed via his chairmanship of the Financial Services Committee. On a visit to New York a while back he told a marvelous story about going into a Seven Eleven store in his home town in Texas to purchase a quart of milk. Setting it on the counter, he remarked to the cashier that the price seemed high. He was promptly met with a tirade against . . . Janet Yellen. His point in retelling the story was that when the cashier at Seven Eleven is venting on the Federal Reserve, something is happening.

How wonderful it would be to have the third highest office in the land filled by someone who gets this simple point. Clearly Mr. Ryan, a towering figure on substance and also by virtue of his campaign for vice president, would be the front runner. But if he decides he’d rather stay at Ways and Means, either Mr. Hensarling or Mr. Brady would be brilliant choices. They could be counted on to move monetary matters into the policy debate at the leadership level of Congress, helping to secure — as Mr. Benko marks — free-market, jobs-creating growth as a defining theme of the Republican Party as it goes into the 2016 election.


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