Second, how do you judge the inflation threat, and what will you do about it when you become president in less than nine months? While currently limited largely to commodities (including oil, food and basic industrial and construction materials), should monetary policy be used to try to drive down the prices of everything else at the cost of slow growth or even sustained recession? Or do you wait and hope that the commodities inflation doesn't taint the rest of the economy and create a virulent inflationary fire that will be even harder to put down? How will your assessment of the inflation danger affect your other policies (health care, infrastructure, etc.)? Will you subordinate various expensive programs if deficit spending to achieve them would exacerbate the inflation?
Third, are you for a strong dollar, or will you continue Bush's policy of letting the dollar sink? Some presidents think a weak dollar helps trade and we should do little to support the dollar. But today, for the first time in living memory, there is a risk that the dollar, if it continues to slide, would be replaced by the Euro as the global store of value. The United States benefits from the dollar's unique role in the world. It has permitted us to have influence in many ways, such as disrupting financial flows to adversaries such as Iran and North Korea. With international contracts denominated in dollars, we gain unfair advantage over all other currencies. Are you prepared to protect the dollar and drive its value up (again, working closely with the Fed chairman) or not?
Fourth, and flowing from the previous question, as noted by Benn Steil (director of international economics at the Council on Foreign Relations), to protect the dollar's value, we cannot let the Federal Reserve try to solve the financial crisis alone by flooding the market with dollars. If we are to strengthen the dollar, then we need the president and Congress to directly fund "on the books" the hundreds of billions of dollars the Fed is creating to help at-risk financial institutions. Of course, if you protect the dollar and fight inflation, you won't have money for new spending programs. Mr. and Ms. presidential candidates, please tell us now -- before we vote -- what your priority will be in this painfully difficult decision.
Fifth question: Notwithstanding the political usefulness of bad-mouthing NAFTA and the United States-Colombia Trade Promotion Agreement, are you committed to retaining and building the public consensus for a liberalized and globally integrated economy? Do you want America to give up on free trade or not -- keeping in mind that if America stops fighting for free trade, the world will go protectionist in a hurry. For all of its drawbacks, America is 10 percent richer each year as a result of our participation in world trade. If there is a 10 percent cut in our wealth each year, pretty soon we will be a much poorer people.
In future columns, I will look at the taxation and regulation policies of the three candidates. But it would be nice to get answers to these first five questions.
Blankley, who had been suffering from stomach cancer, died Saturday night at Sibley Memorial Hospital in Washington, his wife, Lynda Davis, said Sunday.
In his long career as a political operative and pundit, his most visible role was as a spokesman for and adviser to Gingrich from 1990 to 1997. Gingrich became House Speaker when Republicans took control of the U.S. House of Representatives following the 1994 midterm elections.