The Republican Platform on the Federal Reserve and a Gold Commission

The 2012 Republican Platform has been released. Here's what the platform says about the Federal Reserve and a gold commission:

Inflation and the Federal Reserve:

A sound monetary policy is critical for maintain-ing a strong economy. Inflation diminishes the purchasing power of the dollar at home and abroad andis a hidden tax on the American people.

Moreover,the inflation tax is regressive, punishes those who save, transfers wealth from Main Street to Wall Street, and has grave implications for seniors living on fixed incomes.

Because the Federal Reserve’s monetary policy actions affect both inflation and economic activity,those actions should be transparent. Moreover,the Fed’s important role as a lender of last resort should also be carried out in a more transparent manner.

A free society demands that the sun shine on all elements of government. Therefore, the Republican Party will work to advance substantive legislation that brings transparency and accountability to the Federal Reserve, the Federal Open Market Committee, and the Fed’s dealings with foreign central banks.

The first step to increasing transparency and accountability is through an annual audit of the Federal Reserve’s activities. Such an audit would need to be carefully implemented so that the Federal Reserve remains insulated from political pressures and so its decisions are based on sound economic principles and sound money rather than on political pressures for easy money and loose credit. 

Determined to crush the double-digit inflation that was part of the Carter Administration’s economic legacy, President Reagan, shortly after his inauguration, established a commission to consider the feasibility of a metallic basis for U.S. currency. The commission advised against such a move. Now, three decades later, as we face the task of cleaning up the wreckage of the current Administration’s policies, we propose a similar commission to investigate possible ways to set a fixed value for the dollar.

Bottom line: The platform wording about the Federal Reserve is just terrible. It assumes that the Federal  Reserve is needed as a lender of last resort---and simply needs to be more transparent. Further, their is no discussion of the role played by the Federal Reserve in causing the business cycle. It does not address the notion that the Fed is the problem, simply that the Fed needs to be more transparent about its price inflation, market distortion, money printing.

As for the call for a new gold commission, first it should be pointed out that the first gold commission was launched by President Jimmy Carter, not Ronald Reagan (although it was completed under Reagan)

Second, as I have said before, what comes out of a gold commission depends upon who is on the commission. And, I don't expect such economists, who understand the important role of gold, as Joe Salerno, Bob Murphy, Robert Higgs, Thomas DiLorenzo or historian Tom Woods to be named to the panel. Such a commission will be packed with bankster cronies and will accomplish nothing.