Romney’s Next Question

The author of the article suggests that Mitt Romney should ask Obama about his plans for the dollar. The value of the dollar has significantly dropped since Obama has taken office and people want to know what he has to say for it and what his plans are to get the dollar back on track.

Editorial of The New York Sun
October 14, 2012
NY Sun

When Governor Romney meets President Obama for the next debate, the question for which we are going to cock an ear is monetary policy. Mr. Obama is constantly talking about the crisis he inherited. The dollar he inherited had a value of an 850th of an ounce of gold. Its value over the course of Mr. Obama’s nearly four years in office has plunged to less than half of what it was worth when Mr. Obama was sworn. What does President Obama have to say for himself? And will Mr. Romney press the point?

There are those — we’ve heard from quite a few of them — who reckon the question is too theoretical for retail politics. “Consumers don’t want to buy gold. They want to buy food and gasoline and clothes and all the other things that are in the consumer basket,” is the way Chairman Bernanke made the point to Congress in testimony a while back. The line of argument has always struck us as condescending. At the very moment Mr. Bernanke was making his remark, after all, the price of gold was soaring, as people and institutions raced to protect themselves from the very policies he was implementing.

One job of leadership, in any event, is to bring even theoretical issues into sharp relief. President Reagan used to do this with what came to be known as “bracket creep,” the slow but inexorable way in which inflation was pushing middle class Americans into tax brackets the progressives had claimed to intend to apply only to the rich. Mr. Romney might want to put in a call to Jim Rousmaniere, editor of the Keene Sentinel in New Hampshire, where Mr. Romney spends so much time. He is one of the few newspapermen to have pressed Mr. Obama on monetary policy.

It may be that Mr. Romney is wary of opening the question because the collapse of the dollar began under President Bush (these columns have been warning about it for nearly a decade). But Mr. Obama’s interview with the Sentinel offers much with which Mr. Romney can work in illuminating how lost this administration has become on the monetary front. We wrote about it last year, when the value of the Obama dollar collapsed below a 1,500th of an ounce of gold. At the time Mr. Obama gave his interview with Mr. Rousmaniere, November of 2007, the dollar was at an 810th of an ounce of gold. It’s clear by now, in any event, that Mr. Obama is intentionally running a weak dollar policy.

What a vacuum of leadership exists on this front — and not just in America. This weekend, the London Financial Times issued an editorial urging discussion of a policy option it called “extreme money printing.” It was responding to the suggestion by a top British regulator, Lord Turner, that since quantitative easing didn’t seem to be working in Britain [any better, we’d add, than it worked it America], central banks may have to “plough even deeper into unconventional territory,” as the FT put it. It said the remarks of Lord Turner, who is touted as a potential chairman of the Bank of England, have been interpreted as favoring “‘helicopter drops’ of newly printed money.”

This kind of wackiness seems made to order as a target for a candidate like Mr. Romney. He has, among other things, the platform to support a attack on this front. To those who warn that he could be precipitating a recession, he can point out that President Reagan took a recession at the start of his presidency before putting in place the tax and regulatory cuts that, in combination with Chairman Volcker’s tight money policy at the Fed, ignited the Reagan boom that powered our economy through the Clinton years and into the Bush years. The coming debate would be best used not for rehashing the issues the duo has already argued about but for opening new questions for which Mr. Obama’s presidency has much to answer.

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