The Wall Street Journal. Best Ideas? A Gold Commission

Originally posted on Wednesday, February 1st, 2012

Is the idea of convening a gold commission one of the best ideas to emerge in the presidential primaries?

Yes, says Wall Street Journal columnist William McGurn.

Two greatly respected voices of economic wisdom associated with the Wall Street Journal—columnist William McGurn in the January 30th edition of the paper, and former columnist George Melloan, in the print edition of the February issue of The American Spectator—have emerged, almost simultaneously, signaling renewed interest in the gold standard by free market thought leaders.

Mr. McGurn, reflecting on how great ideas can emerge from the crucible of a political campaign, advises one of the candidates to, from his rivals:

Steal their best ideas. Mr. Gingrich has done precisely that with Ron Paul by calling for a commission to study the gold standard. Mr. Romney could easily do the same, echoing Mr. Paul’s call for an honest dollar….

Lehrman Institute founder and chairman, Lewis E. Lehrman, who was announced by candidate Gingrich as the chair of such a commission wrote, in a widely noted editorial feature headlined Lehrman to Romney, Santorum: Join the Alliance for a Sound Dollar, published in the New York Sun on January 29th (and highlighted in RealClearMarkets.com), anticipated just such a call:

At a recent Presidential debate, the Republican candidates discussed a new Gold Commission much like the one to which President Reagan appointed Ron Paul and me in 1981. When asked, Jim Grant and I agreed to serve as co-chairmen of a new gold commission — proposed by Newt Gingrich if he were elected. Just weeks prior, Senator Paul was reported by the Weekly Standard as having called for just such a commission. We said at the time that we would serve on a gold commission established by any president seriously interested in monetary and Federal Reserve reform.

The next gold commission, however, must be different from the Reagan Gold Commission, the majority of which endorsed the managed paper dollar and floating exchange rates. As the two dissenting minority members of the 1981 commission Ron Paul and I filed a minority report. We called for the restoration of the gold standard — that is, a stable dollar defined by law as a certain weight of gold. The minority report, entitled “The Case for Gold,” was later republished in book form.

My views on monetary reform have not changed, except that my sense of urgency is even greater.

Contemporaneously, former Wall Street Journal columnist, and author, George Melloan, wrote an important piece, not yet posted to the Web, entitled Let’s Return to the Gold Standard:  Ron Paul and Lewis Lehrman have been right all along, never more so than in this age of massive debt.  In it, he observes:

Gold pretty much dropped out of the monetary debate during the 20-year dollar hiatus, but it is back now with a vengeance as prices rise and securities markets are roiled by the massive global overhang of sovereign debt.

The time is ripe for Mr. Lehrman’s new book.  That’s because it goes well beyond making a persuasive case for a return to the gold standard and provides a detailed road map for how to get there.  When the time comes for a new U.S. administration and Congress to seriously consider monetary reform—and it will come sooner rather than later if the Fed pursues its current course—Mr. Lehrman’s book will serve as a valuable guide.

It is impossible to improve on the observations of the respected Mssrs. McGurn and Melloan.

That said, one embellishment may be in order.  As Lehrman noted in his New York Sun column:

Who knows? Even a gold Democrat might emerge to pick up the mantle of President Grover Cleveland, a famous gold Democrat, who emphasized the centrality of a sound, stable, constitutional gold dollar.

Recent polling suggests that the American people sense the need for a dollar as good as gold. 

The gold standard is not an ideological issue.  It is not an artifact of the right and has material support from the humanitarian left.  Reliable polling shows its greatest support to include the rank and file of organized labor and the African American community.  The gold standard is a pragmatic, empirical mechanism to unleash the imprisoned lighting of private sector growth and jobs creation while constraining government excesses.  For pure fairness, President Obama’s signature issue, it has never been surpassed.  Thus perhaps we can be forgiven for extending Mr. McGurn’s call beyond the GOP to reach the ears of all Democrats who might wish to claim the integrity of the gold standard—which leans neither right nor left—as part of the Democratic Party’s own legacy as well.  Lewis Lehrman has announced that he and Mr. Grant “would serve on a gold commission established by any president seriously interested in monetary and Federal Reserve reform.”  Gold enables prosperity…with equity.