Picking Mike Pence Was A Grand Slam For Donald Trump
Mike Pence? Full disclosure: I served as head of the Super PAC seeking to draft Pence into the 2012 presidential race. Having long been persuaded of Pence’s superior leadership qualities, I’m even less objective than usual.
We called Pence “The Conservative Champion” and for good reason. Then, in 2012, Pence made the right decision: to run for governor of Indiana. That was an opportunity for distinguished public service. As it happened it was a perfect boot camp for the vice presidency.
The Honorable David McIntosh, now president of the powerful Club For Growth, was the one who encouraged Pence to come back into electoral politics. McIntosh later served as the guru of the Draft Pence For President Super PAC. In my recent exclusive interview, McIntosh recalled:
When I was vacating my Congressional seat to pursue an ultimately unsuccessful gubernatorial run, in 2000, I wanted my seat to be occupied by a true conservative and someone of high integrity and commitment to public service. I turned to Mike Pence. He had run unsuccessfully in 1988 and 1990 and by 2000 had achieved considerable success, and affluence, as a syndicated talk radio host.
Mike replied that he no longer aspired to public office but would, together with his wife Karen, pray on my request and determine whether they sensed a calling. Several months later I encountered Mike at the Indiana State Fair. I asked him about whether he had reached a conclusion.
He replied that he and Karen recognized that he could not shirk the duty. Pence went on to run, and win, and serve America with distinction in the Congress and then to serve splendidly as governor of Indiana. If elected to the vice presidency he will again serve America magnificently.
One of the reasons that Pence showed himself extraordinary may have faded from general memory. It has not faded from mine. Nor has it been forgotten, or forgiven, by the left, who are now highlighting this, much to my delight. In 2010 Pence gave a major speech at the Detroit Economic Club. As the center-left ThinkProgress.org then reported.
The first item of Pence’s five-point for the economy is a “sound monetary policy.” Pence elaborated that he believes a return to the gold standard could create such a policy:
PENCE: Before I move on, I’d like to note, in the midst of all that’s happened recently — massive borrowing and spending, QE2 — a debate has started anew over an anchor to our global monetary system. My dear friend, the late Jack Kemp, probably would have urged me to adopt the gold standard, right here and now in Detroit. Robert Zoellick, the president of the World Bank, encouraged that we rethink the international currency system including the role of gold, and I agree. I think the time has come to have a debate over gold, and the proper role it should play in our nations monetary affairs. A pro-growth agenda begins with sound monetary policy. (Emphasis supplied by ThinkProgress.)
The elitist left is misguidedly neurotic about the gold standard. Properly designed the gold standard favors labor and debtors slightly over capital and creditors and hence carries majority rank and file support among the labor and ethnic left. Timothy B. Lee wrote at the elite left Vox on July 15th, Trump should ignore his running mate’s bad ideas about monetary policy, with reference to the same speech:
Pence also flirted with returning to the gold standard. ‘The time has come to have a debate over gold and the proper role it should play in our nation’s monetary affairs,’ he said. Many economists — including free market thinkers like Milton Friedman — believe the gold standard played a central role in worsening the Great Depression.
It is perverse how the left has reviled Friedman when he was, as he most often was, right, while being deferential to him when he was demonstrably wrong. The international gold standard had ceased operations in 1914. In 1922, it was replaced, in the immortal words of the great French economist Jacques Rueff, by a “grotesque caricature.”
The Economist described that system, quite correctly, as “a mess.” It called itself a gold standard without playing by the rules of the gold standard. The Interwar so-called “gold standard” was a hybrid between Jabberwocky and Calvinball. The true gold standard was but a dim memory by the onset of the Great Depression for which it was framed. The misguided fixation of “many economists” – deluded by the Eichengreen Fallacy — on the role of “the” gold standard in worsening the Great Depression is utterly contradicted by history.
Conservative apostate David Frum, writing in The Wall Street Journal, also stubbornly continues to misunderstand the gold standard. Frum does however astutely observe some similarities between William Jennings Bryan and Donald Trump:
Both men championed constituencies that formerly occupied a position of cultural and political dominance: small farmers in Bryan’s case, the white working class in Trump’s. Both of those constituencies had been economically ravaged for years beforehand: by 20 years of price deflation for the small farmers, by a generation of declining wages for the white working class.
This is a similarity previously noted by David Klinghard in US News and World Report and by Tim Reuter at Forbes.com. It is apt in some ways but not in others. Bryan, by prescribing depreciation through “free coinage of silver,” lost three presidential races. Trump provides a counsel of general prosperity and has thus far gone from victory to victory and is on track to astound the Frums of this world in the general election.
It is disappointing that the erudite but curiously tone-deaf Frum fails to note that the ravaging of small farmers was caused by the post-Civil War restoration of the gold standard at pre-war parity. This forced a painful secular deflation. We are back in the jaws of deflation, this time Fed-induced. Trump twice has stated his appreciation for the gold standard, the very platform on which McKinley soundly beat Bryan. And the gold standard, properly done, is not an instrument of deflation.
Paul Krugman and his “plovers” will rave on against the gold standard. Let them. To adapt a tweet by Neo-Keynesian economist Austan Goolsbee: Roses are red. Violets are pink. Don’t listen to aurophobes. No one cares what they think. To wit:
People suffering from aurophobia usually develop panic attacks when uncovered to gold, or when they see gold. Different folks suffer from totally different symptoms of the panic assault like irregular heartbeat, nausea, sweating, fast breathing, and shortness of breath and a feeling of dread on seeing gold. Being a victim of aurophobia proves to be very uncomfortable because the victim cannot do things normal people do.
Pity the left’s rampant aurophobia. The right’s thought leaders, such as Steve Forbes, have solid evidence for the beneficence of the gold standard properly done. And the New York Sun astutely noted in a recent unsigned editorial, Mike Pence’s Prescience:
Donald Trump’s choice of Mike Pence for vice president would … be a promising pick for those of us who see a restoration of sound money as the essential precondition for returning America’s economy to a trajectory of jobs and growth. No doubt he has lots of other virtues, in that he has experience and success as both a congressman and governor. Were he ever called to the presidency, he would be prepared. But the feature of his political agenda that we have been watching for years is that in respect of monetary reform.
… “What are the building blocks of an incentive-based, growth agenda?” he asked [in his Detroit speech]. The first of his five building blocks was “sound monetary policy.
That, to us, was significant. Mr. Pence’s other four building blocks were terrific, too, including, as they did, “tax relief and reform, access to American energy, regulatory reform, and trade.” It was particularly newsworthy, we felt, that he had marked monetary first and that he was at the van of the leading Republicans on this head. He quoted Lawrence Kudlow’s line about how “the Fed can print money, but it can’t print jobs.” We’d like to think that it’s no coincidence that Mr. Kudlow is advising Mr. Trump (as he did President Reagan).
Mr. Trump himself has already stated that, in principle, he favors sound money. “Bringing back the gold standard would be very hard to do, but, boy, would it be wonderful,” he’s said. “We’d have a standard on which to base our money.”
Donald Trump’s signature promise is to “make America great again.” Trump knows that “it would be wonderful” to restore the gold standard. He has a firm intuitive grasp of why: “We’d have a standard on which to base our money.”
America is struggling through 16 years of economic sluggishness at only maybe half the growth rate of our gold standard eras. Since President Nixon “closed the gold window” on August 15, 1971 – a window cynically smashed by President Johnson — median family incomes have stagnated. The rich have disproportionately prospered.
The American Dream requires prosperity and justice for all. The loss of one or two (or, to hark back to Kennedy, three) percent of annual economic growth may not seem like much. But thanks to the power of compounding (which Albert Einstein famously never called the strongest force in the universe) the American economy now is only two thirds as big it would have been if it had remained on trend line.
This is a big deal. The American Dream lies buried in these ruins. Let’s resurrect it.
Had gold standard equitable growth rates continued we’d all, on average, be making 50% more and be worth 50% more. America’s GDP would be $26+T rather than $18.5T/year.
The Congressional Budget Office once estimated that every one tenth of one percent of GDP adds $314B to federal revenues over 10 years… without raising taxes. True gold standard growth rates would have transformed our hundreds of billions of dollars in annual federal deficits into hundreds of billions in surpluses. That money would rebuild a lot of roads and bridges and a whole lot more.
Trump laudably has committed himself to defending Social Security and Medicare. Good for him! At gold standard growth rates, our social insurance programs can be made solvent for the indefinite future without cutting benefits or raising taxes.
Restoring gold standard rates of job creation, upward economic mobility, and equitable prosperity is the most plausible, easiest, and requisite means of making America great again. More easily done than said. How? Why, by restoring the gold standard, of course!
Let Donald Trump consult Donald Trump: “Bringing back the gold standard would… be wonderful. We’d have a standard on which to base our money.” Spot on.
Then, if Trump — or one of his trusted associates such as Mike Pence, Newt Gingrich, Chris Christie, Larry Kudlow, or Sam Clovis — wishes to know just how to make this happen just pick up the phone and invite one Lewis E. Lehrman (whose eponymous institute I once professionally served) in for a chat. Lehrman was Jack Kemp’s éminence grise of his Gold Standard Act of 1984, the ideal vehicle. Lehrman was called by public intellectual James Grant our “modern Alexander Hamilton.” Invite Steve Forbes — a heroic champion of the gold standard during its long dark age and eminent Treasury Secretary candidate – to participate in that gold standard caucus. While at it, invite Mike Pence, who got it long before most others did.
Time to bring back the gold standard for its equitable prosperity inducing properties. Mike Pence will make a great partner in making America great again. Grand slam.
Originally posted on Forbes.