In the new issue of Forbes, Steve has this article on the economic situation and what the government needs to do about it.
Going for the jugular, he advocates mandating the Fed to focus on the price of gold. “A formal strong-dollar policy is essential. Economists gag at the thought,but the best barometer of monetary disturbances is gold. The Fed should tie the dollar to a gold price of, say, $500 to $550. Though the dollar is stronger today, markets rightly fear that monetary blunders will happen again.”
I suppose that some Austrians will say that the Fed must be yanked out like a bad tooth. Maybe they’re right. I’m inclined to think, though, that a doable first step toward monetary stability is what Forbes is advocating.
Whatever happens in the election, the test of seriousness for the next president and members of Congress will be whether they’re willing to listen to people like Steve Forbes who want to see Fannie and Freddie privatized, government capital allocation ended (not just the horrible Community Reinvestment Act) and the Fed’s powers to inflate curtailed. Or will they listen to naive liberal activists who think that expanding the power of the federal government is the solution for everything?