We wonder if it’s entirely a coincidence that as the world was preparing to celebrate a season of miracles the Secretary of the Treasury, Janet Yellen, started suggesting it’s time for a new Bretton Woods.  Not only that, but the London Financial Times ran out a column by one of its star writers, Rana Foroohar, under a headline that said, “It is time for a new Bretton Woods.”

The last time someone — it was the president of the World Bank, Robert Zoellick — suggested in the FT a restoration of a role for gold in the monetary system, the FT promptly issued an editorial denouncing him.  The last time Ms. Yellen was asked by Congress about anything that smacked of a rules-based monetary system, she replied that the Federal Reserve would “resist any rule,” even a voluntary one, on monetary policy.

Not that a beautiful friendship has suddenly begun between Mrs. Yellen, and, say, Congressman Ron Paul. Mrs. Yellen, who made her remarks at a speech before the Atlantic Council at Washington, did not actually endorse the substance of Bretton Woods, which was the gold exchange standard under which the United States undertook to redeem at a 35th of an ounce of gold dollars presented to it by foreign governments. 

What Ms. Yellen did point out — and shrewdly, in our view — is that it was in 1941 that the leading nations of the world began their work on the post-war monetary treaty that eventually was agreed upon at the village in the White Mountains of New Hampshire known as Bretton Woods. What we took her to be saying is that now, amid a new war and other crises, is the time to start thinking about monetary reform.

Let us just say, that is music to our ears. We’ve been banging this drum more than any other, in hundreds of editorials. The cause of monetary reform has been nursed by a significant faction in Congress, starting with Dr. Paul, and including, among others, Representatives Kevin Brady and French Hill and Senator Rick Scott. Plus the ink-stained sages, like James Grant, Paul Gigot, and Steve Forbes, to name but three.

Then again also, too, calls for monetary reform have been a feature of the Republican Platforms in 2012, 2016, and 2020. What the GOP wants, of course, is different from Mrs. Yellen’s ask. She notes in her remarks that Russia’s invasion of Ukraine redrew “the world economic outlook,” in no small part by “marshaling the power of international cooperation.” Ms. Yellen seeks to build on this cooperative spirit.

Yet her ideas turn out to be leftist schemes like “friend-shoring” — supply chains among “trusted countries” — and a “global minimum tax” and more “green technology.” She does note, though, that “proposals for the IMF, the World Bank, and the post-war international financial architecture” had emerged even “as World War II raged in Europe” to be brought to life at Bretton Woods in 1944.

Mrs. Yellen’s advice is that “we ought not wait for a new normal” and instead “begin to shape a better future today.” Her speech was full of ideas relating to the IMF and World Bank — two institutions created at Bretton Woods. Yet she overlooked the third, and perhaps most important, institution to emerge from that 1944 conference — a sound dollar, defined in treaty as a fixed weight of gold.

That arrangement, not so incidentally, ushered in a remarkable era of progress. Unemployment during the years of Bretton Woods averaged something like 4.6 percent. Thomas Piketty’s inequality rate remained low, until Bretton Woods was allowed to fail and inequality started soaring. Same with the personal bankruptcy rate that Senator Elizabeth Warren watches. The left never seems to want to talk about that.

Yet it’s hard to imagine how one can invoke Bretton Woods and “the post-war international financial architecture” without talking about the gold exchange standard. That’s what’s so cheering about Ms. Yellen’s remarks, even with all the liberal bromides. Any talk of a new “global financial system” is going to have to come back to the monetary question — and the need to see what blame attaches to our modern regime of fiat currency.

Our own view of a first step would be the establishment by Congress of a Monetary Commission to study what the Republican platform has called a “metallic” standard for our money. That was one of the steps leading to the establishment of the Federal Reserve itself, though now the Fed is seen as more a problem than a solution to the monetary question. Hence the logic of moving the discussion of reform to Congress. Miracles, after all, happen.