It seems to be Ron Paul's turn in the GOP spotlight, and while he may be a longshot to win the nomination, his views on monetary policy are representative of the party establishment—and they're highly dangerous, writes Paul Krugman in the New York Times. Paul believes in "Austrian" economics, meaning he sees money "printed without being backed by gold as the root of all economic evil." Such thinkers were sure that the Fed's figurative money-printing to shore up the economy would cause huge inflation—but three years later, it hasn't.
"You might think that having been so completely off-base about something so central to their belief system would have caused the Austrians to lose popularity, even within the GOP," Krugman writes. Instead, "hard-money doctrine and paranoia about inflation" have to come to dominate the party's economic thinking. Paul embodies this philosophy. "What will happen if that doctrine actually ends up being put into action? Great Depression, here we come." Full column here.