Last week, the Virginia House of Delegates Rules Committee passed, by an 11 – 1 bipartisan majority, a bill to establish “a joint subcommittee to study the feasibility of a United States monetary unit based on a metallic standard, in keeping with the constitutional precepts and our nation’s founding principles….” Such a study could prove to be a very big deal indeed.
It would bring a sleeper issue, one crucial to economic growth, to the fore of the national debate. (Full disclosure, this columnist provided, by invitation, a letter in support of this legislation before the subcommittee vote. This respectfully was reported in a wonderful, whimsy-inflected, article by The Washington Post’s Tom Jackman.)
The legislation authorizing this study widely is expected to sail through the House of Delegates. It may well also be embraced by the Virginia Senate and signed by the governor. There’s reason for optimism since it is good policy and good (even bipartisan) politics.
First, this is an excellent piece of legislation. As reported Friday, unemployment remains stuck at 7.9%. This is a national tragedy. Job creation has been punk for over a decade, over three administrations under presidents of both parties. Official Washington leadership — with some important, exceptional, bright lights such as Joint Economic Committee Chairman Kevin Brady, former Republican Study Committee chairman Jim Jordan, House Financial Services Committee chairman Jeb Hensarling, and, in the Senate, Sens. Lee, Cornyn and Rubio — has seemed clueless that the Prime Suspect in punk job creation is lousy monetary policy. Washington will benefit from a nudge from America. And Virginia is quintessential America.
Second, it is a good sign for the Republic that elected officials are listening to the people, a very good thing. This bill has constituencies both Republican and Democratic.
It follows the directive of what may well prove to have been the most vital and innovative plank in the 2012 national Republican Platform: the monetary commission plank. This plank was championed, primarily, by the esteemed Rep. Marsha Blackburn (R-TN), co-chair of the platform committee. Winning this plank was an impressive, savvy, achievement by Blackburn. The call for a monetary commission became the subject of respectful worldwide attention and, obviously, continues to resonate. It can become an important part of Blackburn’s effort to redirect and rebrand the GOP. Blackburn : “What you will see when the platform is opened this afternoon — you’ll see in the preamble how we lay out how we are the ‘Great Opportunity Party….’”
Virginia’s governor, Bob McDonnell (widely considered presidential timber), co-chaired the platform committee. He celebrated the platform as “a conservative vision of governance.” Enactment of this legislation would be seen, nationally, as important evidence that the governor walks the walk as well as he talks the talk. Should the Senate polarize along party lines one expects that McDonnell’s lieutenant governor, Bill Bolling — who also serves in the governor’s cabinet as Chief Jobs Creation Officer — would cast the historic tie-breaking vote in favor.
But the quality of money is not inherently a partisan, nor Republican, issue. A hearty three of the 11 Rules Committee members who voted in favor, Delegates Johnny Joannou, Joe Johnson, and Algie T. Howell, Jr., are Democrats. This is government like it’s supposed to be, “deriving its just powers from the consent of the governed.” This is just as Jefferson declared.
Pollster Scott Rasmussen determined, in polling 1,000+ voters in late 2011, that the two cohorts most enthusiastic for the gold standard are part of the Democratic base: Blacks and members of labor unions. So there is real hope that Virginia’s elected officials from the Democratic Party, whether Blue Dog or Progressive, will honor the founder of their party — that great Virginian Thomas Jefferson —whose legacy included an implacable opposition to bad money.
“Paper money is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted.” … (To J.W. Eppes, 1813)
“Shall we build an altar to the old money of the Revolution, which ruined individuals but saved the Republic, and burn on that all the bank charters, present and future, and their notes with them? For these are to ruin both Republic and individuals. “ (To John Adams, 1814)
“… instead of funding issues of paper on the hypothecation of specific redeeming taxes … we are trusting to the tricks of jugglers on the cards, to the illusions of banking schemes for the resources of the war, and for the cure of colic to inflations of more wind.” (To M. Correa, 1814)
One sourpuss Democratic Virginia Delegate publicly criticized this legislation. The Washington Post’s canny Ben Pershing was able to get, on record, this statement by “Del. Mark Sickles (Fairfax), the Democratic Caucus chairman. ‘It can cost tens of thousands of dollars. Are we seriously going to spend taxpayer resources studying a replacement to the world’s backbone currency? Are we descending into la la land?” Sickles asked.’”
It, of course, is ludicrous to begrudge the spending of “tens(!) of thousands(!) of dollars” to help bring our multitrillion dollar economy back to vibrant economic growth. And it is hoped that Del. Sickles will recognize that Americans are really, really, sick of seeing every intelligent effort to restore vibrant job creation get turned into a partisan football. And that Mr. Sickles will rethink the wisdom of spitting in the face of his own party’s founder, Jefferson.
Good money isn’t a Republican or a Democratic issue. It is an issue of integrity, and of the day. Del. Sickles is right about the dollar being the “world’s backbone currency.” He, perforce, is on untenable ground in characterizing a study of the U.S. monetary unit as “descending into la la land.” Rather the opposite, such a joint subcommittee may just prove a ladder out of la la land.
Constitutional monetary policy is no fringe issue. Much of the elite financial and political media recently has called the gold standard “mainstream.” The London FT, August 23, 2102: “The gold standard has returned to mainstream U.S. politics for the first time in 30 years….”; New York Sun editor Seth Lipsky in The Wall Street Journal : The Gold Standard Goes Mainstream; The New York Times: A Gold Standard is Unthinkable No More; The National Interest: The Gold Standard Goes Mainstream ; Forbes.com: The Republican Platform and the Mainstreaming of the Gold Standard . (The last two authored by this columnist.)
It’s not just media. The immensely sober-sided Bank of England issued, just over a year ago, a severe critique of contemporary monetary policy, Financial Stability Report No. 13 , scoring it as far worse performing, empirically, than the gold standard. And it’s not just for conservatives. As Ernest Hemingway noted, in Esquire, September 1935, “The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”
Virginia need not reach to London, to New York, to dignified yet bygone American figures like Ernest Hemingway, or even deep into its past for the wisdom of such great Virginians as Jefferson (and, for that matter, George Washington, James Madison, and John Marshall, also on record in this matter). The gold standard is a fully contemporary prescription, celebrated by scores of public intellectuals. Prominent among these, of course, is a good Virginia citizen, Dr. Judy Shelton, of the Atlas Economic Research Foundation. A commission will create access to many learned scholars, such as Dr. Shelton, to create a dignified venue in which to address what seems to be emerging as the issue of the day.
The Virginia legislature, members of both houses, and parties, have an historic opportunity to enact and conduct a joint subcommittee to study the feasibility of a United States monetary unit based on a metallic standard. That would put the Commonwealth, whose flag depicts the Goddess of Virtue, in extremely virtuous national company. Gov. McDonnell’s signature would distinguish his office … and add to his national stature.
Yes Virginia, there is a Constitutional monetary unit. Your House of Delegates, with special credit to prime original sponsor Del. Bob Marshall, is greatly to be commended for offering to create a venue for America to rediscover that unit. And a venue to help America recall the vibrant, equitable, prosperity that unit brought and promises, upon its rediscovery, to bring again.
Ralph Benko, an economics policy expert living and working in Washington, DC, served on detail as deputy general counsel to an Executive Office of the President agency under President Reagan and to a Reagan presidential commission.