‘I see myself as neither a hawk nor a dove, but rather a woodpecker. I just keep hammering away on the notion of sound money, hoping to drive in the point that it’s about monetary integrity — whether we are talking about a trustworthy dollar that provides a meaningful measure and dependable store of value, or whether we are talking about stable exchange rates that accurately convey value across borders and through time.’
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That’s from a telegram we received earlier today from the economist Judy Shelton. We’d praised her yesterday in our editorial “Donald Trump’s Fed” as the most articulate among those who grasp the importance of monetary reform. It is one of the promises that President Trump made on the hustings and that is written into the Republican platform on which he ran. It, along with tax and regulatory reform, is key to restoring economic growth and jobs.
To see what we’re talking about when we mark the ability of Mrs. Shelton to put the monetary case so clearly, feature — in tomorrow’s Wall Street Journal — Mrs. Shelton’s latest op-ed piece. “What’s the point of free-trade deals,” the headline asks, “if governments can wipe out the benefits with monetary maneuvers?” She presses the point about how key “monetary integrity” was to the Bretton Woods system that undergirded the great boom after World War II.
Bretton Woods, Mrs. Shelton notes, was based on “fixed exchange rates linked to a gold-convertible dollar.” She notes that no such system exists today and asserts: “No real leader can aspire to champion both the logic and the morality of free trade without confronting the practice that undermines both: currency manipulation.” Government manipulations of exchange rates, she writes, undermine the “honest efforts of countries that wish to compete fairly in the global marketplace.”
What Mrs. Shelton is doing is ahead of the Left intelligentsia. She is illuminating the intellectual principles that candidate Donald Trump took to — among many other places — Wisconsin, Michigan, and Pennsylvania (while Secretary of State Clinton was dancing with Beyonce). “Supply and demand are distorted by artificial prices conveyed through contrived exchange rates,” she writes. “Businesses fail as legitimately earned profits become currency losses.”
Nor is she going to be put off by those who set down critics of the multinational trade deals as hostile to trade. They should, she warns, “be wary of thinking their views are more informed than President Trump’s.” He “has been branded a protectionist,” she writes, “and thus many conclude he is incapable of exercising world leadership. Meanwhile, those who embrace the virtues of global free trade disregard the fact that the ‘rules’ are not working for many American workers and companies.”
Mrs. Shelton shrewdly folds into this paean to the importance of a trustworthy currency the concerns not only of Republicans but also Democrats (she quotes Congresswoman Debbie Dingell of Michigan and Treasury Secretary Lew of the Obama administration). There’s a great deal more to her piece than we can rehearse here. All the more important to savor the piece in the Wall Street Journal itself, in whose pages she’s been hamming the central point for years.
We’d like to think that the confirmation of Secretary Mnuchin will clear the decks for placing some focus on this issue. The new secretary is, after all, going to be occupying the office first filled by Alexander Hamilton, who wrote the law — the Coinage Act of 1792 — with which Congress first defined the dollar along principles like the ones Mrs. Shelton is pressing. May she herself land on the highest branch the president can find, so she can keep hammering away. Rat-a-tat-tat.