Part 3 of a Series
Donald Trump has the insight and the power to turn the current economic debacle into an American Economic Miracle. Gold is the key. Trump senses this.
Eminent monetary analyst Nathan Lewis wrote in Forbes about Britain's embracing of the gold standard: "Upon this foundation, an industrial powerhouse and great empire was created." The gold-based currency engineered by Alexander Hamilton was fundamental to turning America from a clutch of 13 bedraggled former colonies into the most prosperous and powerful nation in history.
The power of gold is dismissed by academic theorizers. Yet gold repeatedly has proved itself a powerful way to unleash prosperity.
As previously noted, a revamped gold standard, while briefly in force, ended the Great Depression. And in the devastated post-WWII Germany with the introduction of high integrity money (albeit not gold) and elimination of price controls "Industrial output increased 50 percent within the year, and national income (in constant prices) was restored to the 1936 level in just over a year (it had fallen 20 percent below this figure)," as noted by Professor Thomas Hazlitt in 1978.
Donald Trump can safely ignore the unanimous opinion of the 40 academic economists polled by the Booth School who scolded gold a few years ago. They helped get us into this mess!
Meanwhile, Trump on the stump showed a shrewd appreciation of gold.
"We used to have a very, very solid country because it was based on a gold standard," Trump told WMUR television in New Hampshire in March 2016. … But he said it would be tough to bring it back because "we don't have the gold. Other places have the gold."
Trump commented to GQ: "Bringing back the gold standard would be very hard to do, but boy, would it be wonderful. We'd have a standard on which to base our money."
Mr. Trump?? Great news!
Contrary to the then-prevailing fake news America has the gold. The United States, Germany and the IMF together have more gold than anyone else. And America has more than Germany and the IMF combined. With the right team, bringing back the gold standard would not be hard to do at all.
Only one other living world leader has shown comparable appreciation for the gold standard. Vice President Mike Pence, speaking at the Detroit Economic Club in 2010 referenced his old friend Jack Kemp, himself a powerful gold advocate, and expressed respect for and his interest in reestablishing the gold standard.
Would going for the gold be politically palatable? A column I wrote for Forbes.com recommending this drew well over a million readers. That implies real political appeal. And according to a 2011 Rasmussen poll 44% of the 1,000 likely voters polled favored the gold standard. Only 28% opposed.
The gold standard enjoys strong support from mainstream Republicans, conservatives, and tea partiers, while splitting the left. Gold enjoyed outright majority support from African Americans and members of labor unions, incurring the wrath only of the progressives. Political manna from heaven?
Foremost among Trump's formidable advisors is National Economic Council Director Larry Kudlow. Kudlow (the obvious candidate to succeed Jerome Powell at the end of Powell's tenure) has a far better grasp of monetary policy than most. And, while not himself a gold standard advocate, Kudlow has cred with several of the greatest living gold standard proponents.
Foremost among these are former Reagan Gold Commissioner Lewis E. Lehrman, publishing magnate Steve Forbes and George Gilder, the world's leading living futurist. All are Trump admirers.
To such a "Trump gold commission" should be added the greatest contemporary scholar of the gold standard, Prof. Lawrence White, and Dr. Arthur B. Laffer, who was at Camp David in 1971 when Team Nixon decided to "temporarily" close the gold window and later, working with financier Charles Kadlec, did pathbreaking work on the gold standard.
Lehrman and Laffer, among others, approached President Reagan with a proposal to go for the gold. Reagan liked it but his advisers thwarted them. Robert Novak recalled in his memoirs, "I asked Reagan: 'What ever happened to the gold standard? I thought you supported it.' 'Well,' the president began and then paused (a ploy he frequently used to collect his thoughts), 'I still do support the gold standard, but—' At that point, Reagan was interrupted by his chief of staff. 'Now, Mr. President,' said Don Regan, 'we don't want to get bogged down talking about the gold standard.' 'You see?' the president said to me, with palms uplifted in mock futility. 'They just won't let me have my way.'" (Reagan's existential issue was winning the Cold War.)
Trump, thusly, could trump even Reagan.
President Trump? Fire your golden bullet to win the economic war against our invisible enemy. Use gold to ignite an American Economic Miracle.
Ralph Benko, co-author of "The Capitalist Manifesto" and chairman and co-founder of "The Capitalist League," is the founder of The Prosperity Caucus and is an original Kemp-era member of the Supply Side revolution that propelled the Dow from 814 to its current heights and world GDP from $11T to $83T. He served as a deputy general counsel in the Reagan White House, has worked closely with the Congress and two cabinet agencies, and has published over a million words on politics and policy in the mainstream media, as a distinguished professional blogger, and as the author of the internationally award-winning cult classic book "The Websters' Dictionary: How to Use the Web to Transform the World." He has served as senior adviser, economics, to APIA as an advocate of the gold standard, senior counselor to the Chamber of Digital Commerce and serves as general counsel to Frax.finance, a stablecoin venture. To read more of his reports — Click Here Now.
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