Progressives at Brookings are seeking to free up the federal government to become even more involved in mismanaging our money by declaring our current system “unconstitutional” and giving Washington even more direct control over our money, further eroding the principle of Fed independence. As Lawrence Kudlow recently wrote in National Review:
Now, down through the years, the Fed has always resisted rules in the name of independence from political pressure.
But there’s an interesting backstory here. In the early 1970s, President Nixon allegedly (it’s never been proven) ordered then-Fed chair Arthur Burns to goose the money supply to spur the economy and help the Nixon reelection effort. This story becomes even creepier, since Nixon and his entourage destroyed the dollar and launched double-digit inflation by breaking the gold-dollar link established in 1944 at Bretton Woods.
So the Fed has a point about politics.
For those who wish to take a deeper look into the history of proposals such as this, take a look at a history of progressive designs on controlling the Fed which I compiled for the Lehrman Institute’s TheGoldStandardNow.org.
Ralph Benko, internationally published weekly columnist, co-author of The 21st Century Gold Standard, lead co-editor of the Gerald Malsbary translation from Latin to English of Copernicus’sEssay on Money, is American Principles in Action’s Senior Advisor, Economics.