The Forbes Platform

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 program of any Republican right now is being offered by a leader who isn’t running — Steve Forbes. He’s out with a new book, “Reviving America: How Repealing Obamacare, Replacing the Tax Code, and Reforming the Fed will Restore Hope and Prosperity.” Reading it Saturday evening while auditing the debate at New Hampshire, we kept thinking what a shame that Mr. Forbes wasn’t there on the stage.

What Mr. Forbes seems able — uniquely, so far — to do is bring the questions of regulation, taxes, and monetary policy into a coherent policy package. All the candidates get some of those issues, starting with Obamacare. Some of them get the tax issue, including several last night who addressed the trillions in corporate cash parked overseas beyond the grasp of the highest taxed industrial country in the world.

Senator Rubio’s scheme of targeted tax cuts or Governor Bush’s 4% growth plan all have admirable elements. Governors Kasich, Christie, and Bush all get the link between tax cuts and growth in jobs. Only Senator Cruz, with what he calls the “simple flat tax,” really gets get the issue of flatness, which, going back to the 1990s, is one of Mr. Forbes’ great contributions to the American political fray.

Where Mr. Forbes brings it all together, in any event, is on monetary reform and the Federal Reserve. This isn’t the first time he’s made this demarche. Two years ago he brought out a book called “Money,” which prompted these columns to call Mr. Forbes the “anti-Piketty,” a reference to the left-of-center French economist who was out with a best seller called “Capital.” But his latest tome melds this issue with the rest.

The failure of fiat money — money without any definition in law and with no connection to gold — ought to be the central element to any Republican platform. The two candidates who really comprehend it are Senator Rand Paul and Mr. Cruz. Dr. Paul has dropped out of the race, now, in order to focus on getting himself re-elected to the Senate (the Sun became last week the first paper to endorse his re-election).

Mr. Cruz, in the debate at Colorado, became the first candidate to declare for a gold-standard, and it was an important moment in this race. But the senator has since then hung back from maneuvering the issue to the van of his argument. The best move he could make would be to pick up Mr. Forbes’ book and read his chapters on what is wrong with the Fed and why it has failed to pull us out of the Great Recession.

The central bank, he argues, has morphed into exactly the wrong institution. It is not the guardian of an honest measure of value that is needed in a free market system. The Fed’s “Soviet-style control over the value and supply of money and interest rates violates fundamental monetary principles,” Mr. Forbes writes. He calls it a “break from America’s free-market principles.” He rues that its failures have “skirted widespread criticism.”

Mr. Forbes argues that the whole Federal Reserve System “should be sharply downsized” and its regulatory functions “transferred to a new agency and its research functions privatized” (the Fed employs something like 300 economists in Washington alone). He would restrict its mandate to keeping the “dollar stable in value” by reverting to the gold standard and “dealing decisively and quickly with the occasional panic.”

What is so remarkable about this moment is that the Congress of the United States — that clumsy beast — is ahead of the candidates. The House has already passed and sent to the Senate the Fed Oversight Reform and Modernization Act. It would set up a system for Congress to audit the Fed and launch the kind of review (as the Fed starts its second century) that could discuss exactly the kinds of reforms Mr. Forbes is advancing.

Just in time for this election. The era of fiat money, into which we were precipitated by President Nixon and a compliant Congress, has brought soaring unemployment, skyrocketing personal bankruptcy rates, and widening inequality. Honest money is the prerequisite for a restoration of a full-growth economy. Combined with a flatter, fairer, simpler tax system, it is the route to an American revival. Is there a network that will invite Steve Forbes to be the sole moderator of a Republican debate?


The New York Sun

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