Ralph Benko

Our presidential candidates squared off in Ohio last week, each merrily indicting the policies of the other. Both speeches lacked one crucial plank in their platforms. Good jobs require good money. The absence of good monetary policy is submerging the whole world in a second decade of “Dark Ages” stagnation … and misery.

Romney’s choice of Columbia business school dean R. Glenn Hubbard as a key economic adviser is promising. It means a Romney administration is more likely to adopt free market policies of economic growth than those offered by Mr. Obama. Obama’s idea of collegial collaboration is to yank his tax increase leash and yell Heel! at Republicans. Obama is hampered by an attitude that treats businesspeople as alien and, other than as his campaign donors, fundamentally sinister. That’s a recipe for, well, 8.2% unemployment. But something important is missing from both.

Forbes.com and RealClearMarkets.com editor John Tamny nails the missing variable:

Unstable money values lead to chaotic pricing of investments and goods purchases in much the same way that an unstable minute would lead to a lot of burnt apple pies. Once this is understood it should be clear that stability of the measure of value is the goal….

Tamny’s right. Good money was key to the Erhard German “Economic Miracle” of 1948, the Wirtschaftswunder — which started out from a much more dire baseline than America confronts. Ludwig Erhard took an utterly destroyed, destitute, and demoralized Germany from ruin to riches in stunning fashion. It is a forgotten story, but… Erhard, in his memoir Prosperity Through Competition, available through the generosity of the Mises Institute here, sums up the basis of the miracle:

“The big chance for Germany came in 1948: it depended on linking the currency reform with an equally resolute economic reform, so as to end once and for all the whole complex of State controls of the economy-from production to the final consumer-which, following in the wake of the people’s nonsensical demands, had lost all touch with reality. Today few can realize how much courage and sense of responsibility were needed for such a step. Some time later two Frenchmen, Jacques Rueff and Andre Piettre, summed up the combination of economic and currency reform thus:


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.


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