Ron Paul, the Fed, and Changing Times

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The times, they are a-changin’. Unthinkable only a year or
two ago, the prospect that Congressman Ron Paul may actually receive
the long-deserved chairmanship of a House subcommittee grows brighter
by the day. And Paul’s longtime nemesis, Federal Reserve Chairman
Ben Bernanke, may soon find his chief congressional detractor in
a position to do a good deal more than mere finger-wagging.

By all accounts, the congressman from Texas, who, as expected,
handily won re-election earlier this month, is in line to chair
the House Domestic Monetary Policy and Technology subcommittee.
In recent years, the subcommittee has, in Dr. Paul’s words,
“basically been a committee that deals with commemorative coins,”
its members too cowed by the majesty of the Fed to actually contemplate
delving into serious monetary reforms. But if Dr. Paul is permitted
by House party leadership to ascend to the chairmanship, there is
little doubt that he will soon be using his new platform to push
for more transparency at the Fed, more congressional oversight of
the central bank, and a phased-in return to the gold standard. (Given
the ferocity of the Tea Party insurgency, it is hard, although not
impossible, to imagine that they would risk alienating the movement
by dissing its founding father.)

Although this last prospect will doubtless make Keynesians like
Bernanke recoil in disgust, a nouveau gold standard is no longer
a pie-in-the-sky notion. The recent actions of the Federal Reserve
– recklessly printing trillions of new dollars and driving
the dollar to all-time lows against gold – are prompting many
of the powerful at home and abroad to rethink the role of gold.
No less august a personage than former Fed Chairman Alan Greenspan
(who in his economic youth was a disciple of Ayn Rand and a “gold
bug” besides) told the Council on Foreign Relations in New
York City only a few weeks back that “fiat money has no place
to go but gold.” Robert Zoellick, the President of the World
Bank, has issued calls for gold to play some role in the international
monetary system.

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23, 2010

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