Call for a return to the gold standard, and “the Washington establishment goes ballistic,” writes Herman Cain in the Wall Street Journal. “Gold is kryptonite to big-spending politicians,” because a return to the gold standard would mean the government could no longer manipulate the economy, Cain argues. In order to grow economically, the country needs “low tax rates and sound money.” Cain, not surprisingly, thinks his 9-9-9 tax plan addresses the first ingredient, while the gold standard addresses the second. It’s not perfect, but it’s the best alternative we have to fix the economy.
Since the gold standard was ended in 1971, the Federal Reserve has been manipulating the value of the dollar via interest rates and other means. But why should the value of the dollar be so flexible when one hour is always 60 minutes and one foot is always 12 inches? When the dollar was defined as a fixed amount of gold, “economic growth was stronger, unemployment rates lower, the price level more stable, and recessions less frequent and less severe,” Cain writes. He argues that the American people and the political center are slowly coming over to his side on this issue (although Gawker clearly is not convinced), but he predicts a long fight. Click for Cain's full column.