Paul, however, can be his own worst enemy on this subject when, in debates, he seems to blame all our economic challenges on inflation, or when he buys into some of the conspiracy theories that have surrounded the Fed in various forms since its inception. In a recent grilling of Ben Bernanke, Paul made an issue of the discontinuation of M3 monetary aggregate statistics, as though the Fed had done this in order to hide something. Okay, that was nutty.
But as a first step toward eliminating the Fed, Paul advocates “legalizing competition — allow gold and silver to circulate with the dollar, and take off all the taxes on gold and silver money.”
Ah, gold! The mere mention of it in today’s modern economy brands you as a nut, or at least an economic hick. But remember, American money was linked to gold in one way or another for most of our history, until 1971 in fact. In his first year in office as president, Ronald Reagan established a blue-ribbon commission to investigate a possible return to gold. It went nowhere, but was Reagan a nut to ask the question? More fundamentally, is there anything nutty about money that would be, as Paul advocates, “convertible and redeemable in something of real value”?
For all his apparent extremism, there’s no other candidate who has managed to excite both Democrat and Republican voters by combining an anti-war message that irritates conservatives with a free-market message that irritates liberals. Nutty? Or brilliant?
If I’m right and Ron Paul doesn’t just fade away as the primary season progresses, he’ll make a real difference. His anti-war message would make life difficult for Hillary Clinton, by drawing away the most pacifist elements of the Democratic base. But it’s on the economics side where I think he could make the biggest impact. In an election year in which bigger government, higher taxes, and protectionism seem to have so much momentum, Paulonomics may be just what is needed to rebalance the debate in favor of growth.
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