Ralph Benko

On a recent episode of the Glenn Beck Show, Beck had an exchange, summarized here, with presidential candidate Rick Santorum.

“I think you’ve got to put the Fed back in the business of just managing the money supply for the purposes of holding inflation in check,” Santorum said. “If the Fed’s only mission was dollar stabilization, then they wouldn‘t be doing what they’re doing right now.”

Glenn pushed Santorum harder on this issue. “There are no checks and balances [on the Fed]. How is this not a criminal organization? Because what they’re doing to us…it’s the biggest heist in human history.”

“To go that one step forward and say ‘Well let’s abolish the Fed and go back to a gold standard,’ I have some serious problems with that,” Santorum said. Glenn cut in.

“You can’t afford the lifestyle we have on gold.”

“The problem is the idea with the gold standard was…gold would increase as economic growth increases,” Santorum continued.

“That’s not necessarily true anymore, I mean we don’t have a lot of gold supplies in this country that we can increase as the economy increases, and can become – in fact, are – dependent on a lot of not particularly great areas of the world for gold mining.”

Yes, Senator Santorum you do have a serious problem. The conservative movement greatly hopes that your comments represent casual and unconsidered statements … and that future pronouncements will reveal an intelligent open-mindedness on monetary policy (a separate question from abolishing the Fed).

For starters: money supply? This is an anachronism. The premier monetarist, Prof. Milton Friedman, disavowed managing the money supply in a famous June 7, 2003 interview with the Financial Times: “The use of quantity of money as a target has not been a success.”

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.