Sen. John Cornyn and Rep. Kevin Brady on a Monetary Commission

Originally posted on Tuesday, January 28th, 2014

On January 13th, the Senate’s #2 Republican, John Cornyn (R-Tx)…

Sen. John Cornyn Official Portrait

… and Rep. Kevin Brady (R-Tx), chairman of the Congressional Joint Economic Committee, published an op-ed in the Washington Times entitled The Federal Reserve needs a 100-year checkup.  It describes their proposed Centennial Monetary Commission.

Some select observations:

Maintaining the purchasing power of the dollar is critical to a strong U.S. economy and to the economic well-being of middle-class American families. The Constitution grants Congress power over our nation’s currency. One hundred years ago, Congress assigned this responsibility to the Federal Reserve. The Fed’s centennial anniversary, reached last month, marks an appropriate time for a constructive and bipartisan review of America’s central bank’s performance over its first century and the proper role for the Fed in the future.

History proves that a sound and stable dollar is the best foundation for robust economic growth.

…

Most importantly, what is the best role and rules for the Federal Reserveto ensure America remains the strongest economy on earth through the 21st century? These are the thoughtful issues and long-term view the members of the Centennial Monetary Commission would address. Both Republicans and Democrats have a common interest in getting monetary policy right. Good monetary policy provides the foundation for a strong economy that is essential to eliminating our fiscal deficit. Given the centennial and the experience of the recent crisis, there has never been a more appropriate time to re-examine the Fed’s role in American life.

The prime sponsorship by Mr. Cornyn in the Senate of Centennial Monetary Commission legislation is a signal, and perhaps watershed, event.   It promises a thorough, empirical, overdue reassessment of monetary policy and review of which monetary policies have been most conducive to fostering a climate of equitable prosperity, job creation, and deficit reduction.