Memo to Donald Trump: The Gold Standard Will Guarantee 4 Percent Growth

Donald Trump (photo credit: Gage Skidmore)

In calling for 4 percent growth, Donald Trump hit a home run.

He has the right instincts. If he follows them he can turn this home run into a grand slam.

When Jeb Bush declared his candidacy, he did it in a speech demanding no less than 4 percent growth:

Growth above all. A growing economy, whether here in Detroit or throughout this country is the difference between poverty and prosperity for millions. If you want to close the opportunity gap, grow the economy. This is a principle that concentrates the mind.

If a law or a rule doesn’t contribute to growth, why do it? If a law subtracts from growth, why are we discussing it? And for what it’s worth, I don’t think the US should settle for anything less than 4% growth a year – which is about twice our current average. At that rate, the middle class will thrive again.

I applauded Bush’s declaration at the time in But Governor Bush never provided the credible plan to get there which he also promised. He soon drifted off to other issues… and drifted down in the polls. Trump focused in on a commitment to job creation and making us rich again, and he rode this pledge to the nomination.

Trump now has unveiled such a plan. His commitment to 4 percent is highly credible. There are credible components in his proposed tax rate cuts and in peeling back oppressive and pointless federal regulations that stifle economic growth. Continue Reading

Fed Up! Hillary Clinton in Cahoots with Attempted “Hostile Takeover” of the Fed

Fed Up activists assemble outside a Congressional hearing (photo credit: Ralph Benko)

I’m fed up with the Fed too, with its chronic policy failures. A lot of evidence shows the Federal Reserve to be a prime cause of lackluster job growth and sluggishness in wage increases.

That said, sometimes a cure is worse than the disease. Now the left, with the support of Hillary Clinton, is threatening to take us, to mix the metaphor, out of the frying pan and into the fire.

Last week, about a dozen arch-progressives from “Fed Up” attended a hearing of a subcommittee of the House Financial Services Committee, “Federal Reserve Districts: Governance, Monetary Policy, and Economic Performance” in Rayburn House Office Building. I also attended.

The title of the hearing sounds boring. What was really going on was anything but boring.

I wrote about this hearing at length in my most recent column at, “The Left’s Fed Up Makes A Naked Power Grab For Control Of The Fed“:

In scope, the left’s plan makes trivial by comparison Auric Goldfinger’s “Operation Grand Slam” to contaminate America’s gold holdings at the US Treasury Depository at Fort Knox. Goldfinger planned to turn them radioactive. Those holdings amounted, in 1964, to about $14 billion. They are now valued at close to $200 billion.

Either way, a tidy sum. Yet it’s just a nickel compared to the Fed’s more than $4 trillion holdings.

Most impressive. The left is undertaking its own Operation Super Grand Slam.

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Hillary Clinton Elevates the Federal Reserve to God-Status

Former Secretary of State Hillary Clinton (photo credit: State Chancellery of Latvia via Flickr, CC BY-SA 2.0)

On Monday, Donald Trump stated what is essentially a fact to anyone who follows financial markets — the Federal Reserve has created a “false economy” that has artificially inflated the stock market.

Via Reuters:

“They’re keeping the rates down so that everything else doesn’t go down,” Trump said in response to a reporter’s request to address a potential rate hike by the Federal Reserve in September. “We have a very false economy,” he said.

“At some point the rates are going to have to change,” Trump, who was campaigning in Ohio on Monday, added. “The only thing that is strong is the artificial stock market,” he said.

This isn’t controversial. The financial media constantly speculate about whether the Federal Reserve will raise interest rates and how that will impact the markets. It is generally understood that higher interest rates spell trouble for equities — and that would be especially true given the historically overbought status of the stock market.

Hillary Clinton certainly knows this. She’s not stupid. But, whether out of loyalty to Goldman Sachs or out of political expediency, Clinton responded to Trump’s comments by defending the Federal Reserve as an institution that should be above reproach:

Democratic presidential candidate Hillary Clinton criticized Republican rival Donald Trump on Tuesday for making comments about the Federal Reserve’s monetary policies, which she said should be off-limits for U.S. presidents and presidential candidates.

“You should not be commenting on Fed actions when you are either running for president or you are president,” Clinton told reporters on her campaign plane.

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The Best Hope for Restoring the American Dream Now Lives in the US Senate

Sen. John Cornyn (R-Texas) (photo credit: Gage Skidmore)

Who will conjure the American Dream back for us?

Politics is part prestidigitation, part reality. A great magician distracts her audience’s attention while producing the payoff. Abracadabra!

Want to see how it’s done? Focus on the hidden hand.

In this case, the United States Senate.


Money matters.  Bad money “engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”  Bad money “is noticed by only a few very thoughtful people … gradually overthrows governments, and in a hidden insidious way.”

Lucky for America, we have, in the Congress that “one man in a million” riding to our rescue with a proposed monetary commission  Actually, greatly against the odds, we have several: Rep. Kevin Brady (the monetary commission’s prime sponsor), Rep. Jeb Hensarling (Chair of the committee of jurisdiction, House Financial Services Committee), and Rep. Paul Ryan (Speaker). Together almost unheralded, they got this antidote to what is stifling American job creation passed last November.

The Congressional Research Service summarizes it:

This bill establishes the Centennial Monetary Commission to: examine how U.S. monetary policy since the creation of the Federal Reserve Board in 1913 has affected the performance of the U.S. economy in terms of output, employment, prices, and financial stability over time… and recommend a course for U.S. monetary policy going forward.

This excellent piece of legislation could finally smoke the snake out from the wood pile.

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Everything I Know About Good Economic Policy I Learned From Mother Teresa

(Editor’s note: On the occasion of the canonization of Mother Teresa, we reprint a 2013 column from Ralph Benko, our senior advisor, economics, from about his 1979 personal encounter with her.)

My close encounter with Mother Teresa was a chance one, in 1979.  This chance encounter taught me everything I know about good macroeconomic policy.

I, a young law student, was standing on 41st Street, by the Port Authority bus terminal in New York City, one afternoon.  I was waiting to be met by my then girlfriend.  I held three roses purchased for her inside the terminal.

She was late.  I walked down the long, deserted, New York City block looking for her.  And then I walked back.   Walking in the opposite direction was a small party: a priest, a monk, a nun dressed in white, and a tiny old woman, her face weather-beaten and lined, dressed in a coarse brown robe. I thought to myself, “the tiny woman sure looked like Mother Teresa.”

It did not immediately click. I was under the impression that Mother Teresa was far away in Calcutta.  It never occurred to me that she traveled.  She having been on the cover of Time Magazine, a few years before, under the headline “Living Saints,” I assumed her an international celebrity always thronged by crowds. Destined for the Nobel Peace Prize.  (Now beatified.)  I thought, based on the Time cover illustration, her to be 6 feet tall. So far away….

A priest, a monk, a nun, and … who else could it be? Continue Reading

The Fed Needs Adult Supervision. Time to Pass This Bill.

Photo credit: Kurtis Garbutt via Flickr (CC BY 2.0)

After meeting with progressive lobbyists at the Federal Reserve’s annual Jackson Hole retreat, Fed policymakers declared on Friday that the Fed needed new “tools” to manage the economy, including the ability to buy non-government-backed assets like corporate debt, which would add to the Fed’s historically gargantuan $4.5 trillion balance sheet.

On Sunday, The Wall Street Journal editorial board responded by calling the Fed a “political body” and, for the first time, endorsing the Centennial Monetary Commission Act:

One place for Congress to start would be to pass Rep. Kevin Brady’s idea for a monetary commission to consider the role and structure of the Fed in its second century. Commissions can be political evasions, but in this case such a body with the right members could ignite a debate about the Fed that the monetary priesthood and most of Washington don’t want to have. In a healthy democracy, no body can accumulate power as the Fed has without more accountability.

Ralph Benko, a major advocate for the Centennial Monetary Commission Act and a senior economic advisor to American Principles Project, called The Wall Street Journal’s endorsement a “big deal” in a post yesterday:

This is a big deal. The monetary commission actually has been passed by the House and now is pending in the Senate… This is a high-power, and historic, piece of legislation. This commission is the optimal way to raise the issue of monetary integrity and determine the best method to achieve it.

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The Fed’s Surrealistic “Melting Clocks” Monetary Policy Is the American Dream Killer

Salvador Dali with Babou, the ocelot and cane. 1965. (via Wikimedia Commons)

Houston, we’ve had a problem here.” With those low-key words, command module pilot Jack Swigert of Apollo 13 revealed that, in the later recollection of mission commander James A. Lovell, its “oxygen tank No. 2 blew up, causing No. 1 tank also to fail. We came to the slow conclusion that our normal supply of electricity, light, and water was lost, and we were about 200,000 miles from Earth.” NASA’s heroic and successful effort to return the crew safely home is part of national lore and history.

Washington, we’ve had a problem here,we, the voters, are saying, far more emphatically. The most recent government measure shows that America’s economic growth rate slowed, in the last quarter, to a rate of only 1.1 percent, about one-third of normal American economic growth rates.

This may not sound like a big deal. But it is. It means that job creation, including our ability to get better jobs, raises, bonuses and promotions, has vanished.

It means the death of the American Dream. Poor growth compounded over time is the prime cause of the collapse in people looking for work, the ballooning of the federal deficit, and the weakness in our social insurance programs, Social Security and Medicare.

Breaking News! There’s a solution, and the Wall Street Journal editorial board finally, for the first time, has weighed in to advocate that solution (or at least the process from which a solution can be derived):

One place for Congress to start would be to pass Rep. 

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The Federal Reserve Just Joined Facebook. Here’s How the Internet Reacted.

The Federal Reserve recently decided to create a Facebook page to interact with the American people. So far, the page has received very little attention — just 11,250 likes. It has, however, received the attention of a committed group of anti-Fed activists, and the results have been pretty hilarious.

How did the Internet respond to an innocuous post defining the FOMC (Federal Open Market Committee)?


It gets worse:

Somewhere Fed Chair Janet Yellen is banging her head on her desk…

This goes on and on for hundreds of comments. And, even more ridiculously, it is happening on EVERY. SINGLE. POST.

Some people are even using Facebook’s “report” feature to try and take down the page:

The anti-Fed trolling isn’t limited to the Federal Reserve’s official Facebook page. Check out this unofficial page that presumably existed prior to the launch of the official page. It includes a rating system, where Facebook users have given the Fed an average rating of 1.4 out of 5. Here are some of the reviews:

Yikes. Welcome to the Internet, Janet Yellen.

Jon Schweppe is the Communications Director for American Principles Project. Follow him on Twitter @JonSchweppe. Continue Reading

Would Donald Trump or Hillary Clinton Make the More Effective Executive?

From left: Donald Trump and former Secretary of State Hillary Clinton (credit: Gage Skidmore/Marc Nozell)

French soldiers in Lalain France, in 1794, reported a Rain of Toads. The 2016 presidential race makes one nostalgic for such relative normality. Underneath the media’s current Rain of Toads this election turns on the question of whether Trump or Clinton can better restore the American Dream. Good.


Trump emphasizes prosperity. His enemies caricature him as heaping more wealth on the already wealthy while neglecting, or even fleecing, workers and the poor. Clinton’s long arc bends towards justice. Her enemies lampoon her as attempting to impose the “equal sharing of misery” that socialism and its derivatives always induce.

Trump and Clinton and their critics all possess more than a grain of truth.

But there’s more to it.

Both candidates have been reasonably clear as to their priorities. Both have been reasonably specific about the policy formulations on how to get there.

Trump promises to make America great again.  How?  By, among other things, dramatically cutting the US corporate tax rate, eliminating the death tax, and other tax cuts.

Clinton promises to make America fair again. How? By, for example, raising taxes on the rich to subsidize colleges costs, refinance student debt, and provide job training programs.

Their promises are pretty clear.  That said, campaign promises are notorious for getting broken. Can either or both of the nominees achieve their stated objectives?  Let’s pay some attention to the interesting, mostly overlooked, question of whether the candidates show signs of effectiveness, like Reagan or Bill Clinton, or ineffectuality, like Ford or Carter.

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Acton Institute Praises Gilder’s New Book “The Scandal of Money”

Earlier this year, American investor, economist, and scholar George Gilder released a ground-breaking new book on global economics called The Scandal of Money: Why Wall Street Recovers but the Economy Never Does.

Gilder’s book has drawn praise from luminaries like former senator Jim DeMint, entrepreneur Peter Thiel, and CNBC’s Larry Kudlow.

In the summer 2016 edition of the Acton Institute’s journal, Religion and Liberty, Stephen Schmalhofer added his name to the list of people who enjoyed The Scandal of Money:

Perhaps the only futurist worthy of that grandiloquent title, Gilder draws on a lifetime of insights into entrepreneurship and innovation to consider the problems caused by the present state of American money. Generously sharing his pages with the best underappreciated thinkers, like 20th-century French economist Jacques Rueff, and introducing relevant innovations in information technology, Gilder considers possible solutions: a modernized gold standard and decentralized digital currencies like Bitcoin. Gold and Bitcoin both offer the advantage of irreversibility, desirable in the same way that the results of an experiment should not be manipulated after their collection. Lacking a philosopher’s stone, we must expend time in the form of capital and labor to produce more gold. Mined not from the ground but through advanced mathematics, digital currencies like Bitcoin defeat attempts at counterfeiting with timestamping. Their irreversibility is anchored in the scarcest resource—time. In the author’s imaginative prose: “Sound money requires hostility to time travel.”

If Trump and Sanders are the tribunes of anxious middle Americans, failed monetary policy is partly responsible for their rise.

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