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People often ask why presidential candidates like Ron Paul stay in the race when they haven’t a snowball’s chance of victory. Some (arguably Newt Gingrich) may just adore the sound of their own voices echoing on television every night, or (also like Gingrich, or perhaps Herman Cain before he crashed and burned) are using the publicity to hustle books and videos or secure media gigs. It’s also sometimes said candidates aim at securing leverage to affect their party’s platform or campaign message.
But as Ramesh Ponnuru explains at NRO today, Ron Paul doesn’t simply have a pious aspiration of exerting leverage over Republican policy thinking down the road: he’s already won it by affecting the way other Republicans think and talk about monetary policy.
Republicans and conservatives have started to take a much harder line against inflation and a Federal Reserve they consider too inclined toward monetary expansion. In the early 1980s, supply-siders would sometimes criticize Paul Volcker’s Fed for fighting inflation too vigorously. Few on the right say anything similar today.
This rapid shift in positions has several causes. The view that overly loose Fed policy contributed to the housing bubble of the last decade became the conventional wisdom. The massive expansion of the money supply in the wake of the financial crisis alarmed many observers. But the shift in position was also a testament to Representative Ron Paul’s dogged campaign against the Fed and its allegedly inflationary ways, and for a gold standard. If not for the Texas Republican — who has long been the congressman most interested in monetary policy, and now chairs the subcommittee with jurisdiction over it — it is hard to imagine that Newt Gingrich would have proposed a new commission to examine the gold standard, or accused Fed chairman Ben Bernanke of being “the most inflationary, dangerous, and power-centered chairman of the Fed in the history of the Fed.”
The real problem, suggests Ponnuru, is that Republicans as a whole have no particularly coherent view on monetary policy, but rather a set of impulses or prejudices in search of a coherent view. Paul knows exactly what he thinks, and has used this campaign to relentlessly promote it. And while Republican pols for the most part haven’t leapt on board Paul’s demands for a return to a Gold Standard, they have, by contagion, gotten into the habit of favoring generally deflationary policies.
Many Republicans tell pollsters that they will not vote for Paul because of his foreign-policy views. Nobody says that his monetary views are a deal breaker; no pollster even bothers to ask. There is no organized opposition to Paulite views on money within the Republican party or conservative movement, and the people who hold those views hold them intensely. Thus the progress of those views…
The next Republican president’s appointees to the Fed will not insist that the money supply never increase. Most of the economists in his administration will not be supporters of the gold standard, or opponents of the Fed’s existence. What Paul has accomplished is to set a tone for the economic-policy debate on the right.
That’s quite an accomplishment, in a negative sense, when you think about it. Having already abandoned the long-held bipartisan consensus favoring Keynesian stimulus measures during a recession, GOPers under Paul’s influence have now overwhelmingly become hard-money fans who think the remote possibility of inflation trumps any interest in encouraging growth or full employment. It’s an unfortunate development among many in the recent evolution of the conservative movement and the Republican Party.
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Josef K on February 16, 2012 3:41 PM:
Representative Ron Paul’s dogged campaign against the Fed and its allegedly inflationary ways, and for a gold standard.
I could deal with the first part, but the second is so...insane, I really don't understand how anyone giving it 10 seconds of serious thought could advocate it.
Then again, the man is 77 and possibly suffering the onset of dementia. Its not unheard of.
terraformer on February 16, 2012 3:57 PM:
Bill Moyers had an interview recently with Bruce Bartlett, and in it there was a great comment from Bruce (long, but good):
The conservative side of our political spectrum has had an outsized voice over the last few years. I think especially since the establishment of Fox News, which has created an echo chamber in which people just hear the same ideas repeated ad infinitum.
And you know, it's just basic advertising, basically. You hear the same idea over and over again. Or you can call it propaganda if you like. It's broadly believed and people just keep saying these things all the time, that "Rich people create jobs." "Yes, rich people create jobs." "They're motivated primarily by taxation." "Yes, they're motivated by taxation." "We must cut their taxes." "Yes, we must cut their taxes."
I think that's about right. They don't know or have any idea or really care what they're saying, as long as the discussion is about someone or something other than a spotlight on what they're doing to enrich themselves and their friends.
Robert on February 16, 2012 4:25 PM:
Way to much ink spilled here Ed dedicated to Ron Paul and how his gold standard madness may have infected the rest of the field of midgets. Chicken/Egg, Egg/Chicken? It is still a hysterical and crappy serving of scrambled economic eggs those people are offering.
Craptcha: "probable iersanc" No should read 'likely insane'
emjayay on February 16, 2012 4:31 PM:
I'm thinking there's a picture of Newt in the Mirriam-Webster's by the word "hyperbole." And maybe that quote. (“the most inflationary, dangerous, and power-centered chairman of the Fed in the history of the Fed.”) Or for that matter any one of hundreds of other Newtisms.
Danny on February 16, 2012 4:39 PM:
Call me a cynic, but Republicans will cease promoting voluntary economic contraction as the preferred remedy to the whatever is the ailment du jour, at the exact moment there's a Republican in the White House again.
terrraformer on February 16, 2012 4:45 PM:
Danny:
Pretty much. As cleek observed, today's conservatives defined: against whatever Democrats are for, updated daily.
wihntr on February 16, 2012 4:46 PM:
I think the problem is even more basic. Most people in this country do not study economic theory, in college or high school. There is very little economic news or exposition in the media-- lots of market news and anaysis, but not a lot of economic news or anaysis. So when a politician says "We can't afford to pay unemployment benefits because we (the country) don't have the money" folks tend to nod their heads and say, "Yeah, we got a huge debt already. How we gonna do that?"
If everyone had to take a basic macroeconomic principles class in high school, and if economic literacy were deemed to be as important a goal of higher education as, say, cultural literacy, nuts like Paul wouldn't get the time of day from us. Neither would politicians be able to get away with saying that the way to get out of a deep recession is to drastically cut taxes and government spending.
gab on February 16, 2012 4:53 PM:
First, Keynesianism has two "e's" Seocndly, a gold standard may be outdated (crazy, worthless, asinine, etc. take your pick) but debating Federal Reserve policies is a worthwhile endeavor.
The Fed has embarked on a significant, some would say unprecendented easing campaign, with potentially great risks. Promising to keep rates low until "late 2014 at least" is extremely risky, IMO, with potentially great damage to the Fed's credibility if they become unable or unwilling to fulfill their promise. Purchasing trillions of dollars worth of long Treasuries and mortgages (without an exit strategy) is also potentially very risky should long rates increase.
Let's not let the messenger obscure the message or cause us to take sides without a thorough analysis.
gab on February 16, 2012 4:54 PM:
make that "secondly" !
nerd on February 16, 2012 5:06 PM:
The real problem, suggests Ponnuru, is that Republicans as a whole have no particularly coherent view on monetary policy, but rather a set of impulses or prejudices in search of a coherent view.
And this is different from how the modern GOP determines 'policy' for other things how?
smartalek on February 16, 2012 5:15 PM:
"the recent devolution of the conservative movement and the Republican Party."
Fixed it for you
pj in jesusland on February 17, 2012 3:39 AM:
Call me cynical but I think the reason GOP candidates like Ron Paul is because of his history of making racist remarks.
Libertarianism provides an umbrella ideology for racists who think that with any law against hate speech the federal government oversteps its authority. Committed libertarians like Ron Paul believe the government should tolerate racism and that the market alone determines whether or not racism makes sense.
This aspect of liberterianism appeals to the GOP's southern conservative base.
bob h on February 17, 2012 7:32 AM:
It is the independent Fed that controls monetary policy, so what the republicans think about it is pretty academic. Except for the possibility that a President Romney could promise to appoint Paul Chairman of the Federal Reserve.