Scott Galupo

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A Sane Mitt Romney Distinguishes Himself on Monetary Policy

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September 7, 2011 RSS Feed Print

A key feature of former Gov. Mitt Romney's recently-introduced jobs plan is a demand that China adopt a floating exchange rate for its currency.

Smart move.

The plan rightly says of China's currency manipulation: "The practice provides an invisible subsidy to Chinese goods sold internationally and an invisible tariff on other nations attempting to sell in China." [See photos of the GOP hopefuls on the campaign trail.]

By implication, Romney's call for China to lets its exchange rate float means that he believes that America should (continue to) let its exchange rate float. It's depressing that this is at all noteworthy: Mitt Romney, therefore, does not believe that America should return to a gold standard.

This sets him apart from Rep. Ron Paul and possibly Rep. Michele Bachmann (she's "thinking about it"). Not that anyone cares, but the departed Tim Pawlenty also made silly noises about America's "fiat money."

Romney's good sense on these matters extends to a broader acceptance of Federal Reserve authority. Drawing an important line in the sand between himself and Gov. Rick Perry, Romney, in a recent interview with CNBC's Larry Kudlow, refused to mudwrestle with Ben Bernanke. "I think Ben Bernanke is a student of monetary policy; he's doing as good a job as he thinks he can do," he told Kudlow. "I'm not going to spend my time going after Ben Bernanke. I'm not going to spend my time focusing on the Federal Reserve." [Read: Romney's Jobs Speech Targets Obama, Not GOP Foe Perry]

Going back a to the last election, I stumbled on this now-heretical-sounding "Republican stimulus plan" that Romney touted on National Review. In 2008, Romney sounded awfully congenial, and not a little like "liquidity trap" watchdog Paul Krugman:

As Christina Romer, Barack Obama's designee as chairperson of the Council of Economic Advisors concluded from her study of the Great Depression, bad monetary policy was its greatest cause and good monetary policy was its most effective cure. The Fed should continue to expand the money supply [emphasis mine]. And, it should confirm that it will not tolerate deflation—the pain of inflation pales in comparison.

Mitt Romney may be a robot, but he's a robot that's been programmed for sanity.

Tags:
Rick Perry,
China,
Ron Paul,
Republican Party,
2012 presidential election,
Ben Bernanke,
interest rates,
Michele Bachmann,
Mitt Romney

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Executive Order 11110 was issued by U.S. President John F. Kennedy on June 4, 1963.

John Fitzgerald Kennedy, the 35th President of the United States, was assassinated at 12:30 p.m. Central Standard Time (18:30 UTC) on Friday, November 22, 1963,

On June 4, 1963, a little known attempt was made to strip the Federal Reserve Bank of its power to loan money to the government at interest. On that day President John F. Kennedy signed Executive Order No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve. Mr. Kennedy's order gave the Treasury the power "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." This meant that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation. In all, Kennedy brought nearly $4.3 billion in U.S. notes into circulation. The ramifications of this bill are enormous.

With the stroke of a pen, Mr. Kennedy was on his way to putting the Federal Reserve Bank of New York out of business. If enough of these silver certificats were to come into circulation they would have eliminated the demand for Federal Reserve notes. This is because the silver certificates are backed by silver and the Federal Reserve notes are not backed by anything. Executive Order 11110 could have prevented the national debt from reaching its current level, because it would have given the government the ability to repay its debt without going to the Federal Reserve and being charged interest in order to create the new money. Executive Order 11110 gave the U.S. the ability to create its own money backed by silver.

After Mr. Kennedy was assassinated just five months later, no more silver certificates were issued.

dan of CA 1:08PM February 24, 2012

Jeremy,

Romney is a likable guy. The reason people call Romney a robot is because of his work ethic. He was the only crazy person to go against a Kennedy in a Liberal state such as Mass, and he was actually winning. Romney is super competitive, and maybe too optomistic. Romney never sleeps or gives himself time off unless he's made to. If someone didn't change the locks on the White House, Romney would probably be working there right now during the night to correct the situation we're in. Can you imagine Obama's surprise if he woke up in the middle of the night and found Romney taking his phone calls in his oval office, telling the Chinese to get their act together. That is why Michelle made them change the locks. As crazy as it sounds at least though, something would have gotten done in the Oval Office. That's why Romney's a robot, he had to be to compete in the 21st century, and that is why iphones have replaced pay phones and robots have replaced so many workers in the manufacturing industry, because robots are people my friend. This is also why true Romney followers call themselves affectionately rombots.

D12345 of MD 5:17PM September 09, 2011

I meant to say "completely normal guy".

Jeremy Olson of NY 4:37PM September 09, 2011

Scott Galupo

Scott Galupo

Scott Galupo is a Washington-based freelance writer. He formerly worked for House Republican Leader John Boehner, and was a staff writer for The Washington Times.

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