Excerpt from Forbes.com:
Congress delegated weights and measures to the National Institute of Standards and Technology, which is doing a stunningly great job of it. Congress delegated the power to regulate the value of the dollar to the Fed, which is making a botch of it. The value of the dollar has shrunk by 85% over the past 45 years due to the Fed’s terrible quality control.
Are Worstall, me, and, for example, Steve Forbes (one of the rare and crucial public intellectual virtuosos on the importance of monetary policy and how to get it right) exaggerating for effect? Consider these words by the architect of the world economic order, John Maynard Keynes, written almost a century ago:
There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process 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.
Debauch is a rather fussy old word. Let’s modernize it.
Just in case you are a Keynes Denier, consider what Copernicus, the bloke who figured out that the Earth revolves around the Sun, rather than vice versa, had to say on the same subject in 1525:
ALTHOUGH THERE ARE COUNTLESS MALADIES that are forever causing the decline of kingdoms, princedoms, and republics, the following four (in my judgment) are the most serious: civil discord, a high death rate, sterility of the soil, and the debasement of coinage. The first three are so obvious that everybody recognizes the damage they cause; but the fourth one, which has to do with money, is noticed by only a few very thoughtful people, since it does not operate all at once and at a single blow, but gradually overthrows governments, and in a hidden, insidious way.
Heliocentricity, for which Copernicus primarily is known, is antique. Antiquity does not invalidate the fact that the Earth revolves around the Sun. Neither does the venerability of his observations on money make them atavistic. Rather the opposite.
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. It now sits in the World’s Greatest Deliberative Body, the United States Senate.
It portends as crucial to restoring the American Dream.
Its prime Senate sponsor, another “man in a million,” is no less than the Honorable John Cornyn, the #2 leader of the Senate and Senate Whip. Bonus: it is in the jurisdiction of the excellent Senate Banking Committee Chairman Richard Shelby.
It emerged into plain view last month. So, thereby, did the pathway out of the no-jobs box canyon into which Washington has ridden America.
The Wall Street Journal editorial board finally, officially, took note of the Centennial Monetary Commission and called for its enactment in its August 28th Review & Outlook:
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.
The American Dream has not one but two components: Prosperity and Justice for all.
Read more at Forbes.com.