Ralph Benko

What is the next direction in the Republican Civil War?

Best guess: Follow the Money.

Americans feel their dollars shrinking. We don’t like it.

And we are groping for a way to stop it.

The left is reported shamelessly cheerleading for a bout of inflation in no less than the lead story of the October 27 Sunday New York Times: “In Fed And Out, Many Now Think Inflation Helps.” The story states, for example, that Harvard economist Kenneth S. Rogoff is championing inflation of 6% a year for “a few years.”

High inflation is a terrible thing, period. Three years of 6% inflation represents a 20% pay cut for those on fixed incomes, a 20% wealth tax for those in dollar-denominated assets that won’t inflate. This is a call for an aggressive devaluation — and, implicitly, a rolling default. The last frolic with inflation led to a skyrocketing “misery index.” The next one will too.

This shift in stance by progressive economic elites, which the Times subheadlines “A Break From The Past,” gives the GOP a political opening to reunite … and conquer.

The Civil War in the GOP, now, is a manifestation of a struggle between populism and elitism. Public intellectual Jeffrey Bell (with whom this columnist is professionally associated) nailed this in 1992 in his influential Populism and Elitism: Politics in the Age of Equality. Events uncannily have followed his predictions.

The yawning gap between the popular and elite opinion streams shows up now as the Tea Party vs. the Republican Party. The sooner the leaders of the Republican regulars recognize the nature of the radical populist discontent the better. Mitch McConnell and John Boehner both are capable of addressing the Tea Party’s discontents and reuniting the Grand Old Party.

What can reunite the GOP with its populist base? Addressing the shrinking dollar, that’s what. The tension between populism and elitism, as well as the issue of the quality of the dollar, goes back to the very beginnings of America. It has re-emerged in a big way.

The American Revolution was precipitated by a girdle maker named Tom Paine. Paine wrote a pamphlet entitled Common Sense. He became the prophet of (small l) liberal (small r) republicanism. And, not incidentally, Paine passionately championed honest money.

Ralph Benko

Ralph Benko, author of The Websters’ Dictionary: How to use the Web to transform the world. He serves as an advisor to and editor of the Lehrman Institute's thegoldstandardnow.org and senior advisor to the American Principles Project.