Superpollster Scott Rasmussen has pulled the pin and rolled one of his patented hand grenades under the chair of the Political Class. Rasmussen’s “October Surprise” is contained in a recent poll showing 44% of likely voters favor returning to the gold standard, 28% opposed. That intensifies. If the public knew that it would “dramatically reduce the powers of bankers and the political class to steer the economy” support goes up to 57%. Opposition drops to 19%.
Reducing the power of bankers and the political class — along with gold’s empirical record of turbo-charging job-creation and economic growth — is core for gold’s proponents. Thus, that inevitably will become public knowledge and make gold a potentially huge electoral asset.
And there’s more. Rasmussen’s results show that 79% of Tea Party voters (and 69% of simply self-described Republicans) would favor such an elitism-constraining gold standard. The only solid majority opposition comes, unsurprisingly, from self-described members of the political class. If anybody picks up on this dynamic it could prove decisive in what remains a remarkably fluid field with early contests fast approaching.
Rasmussen’s numbers strongly suggest gold is an electoral jet stream. Fly with it and enjoy the tailwind; into it and suffer from headwinds. More than this, Rasmussen may have uncovered a potential “Panama Canal Treaty”- scale issue for 2012. Ronald Reagan, noting audience enthusiasm, elevated what had been a throwaway line criticizing the surrender of the canal back to Panama into a major campaign theme. Others aspirants disdained it, giving Reagan a critical edge to, eventually, a hard fought victory.
Herman Cain and Ron Paul both are on record as supporting the gold standard. Both are doing surprisingly well given their respective improbabilities, notwithstanding having handled the gold issue with extreme gingerness. It can be argued that they have benefited, at least partially, from gold’s “tailwind.”
Gov. Rick Perry’s initial strong showing correlated with his well-publicized critique of Ben Bernanke. Gold’s tailwind effect? Newt Gingrich’s climb into third place became more noticeable around the time of his widely noted call for “hard money with a very limited Federal Reserve” – a comment widely noticed and interpreted as Gingrich dipping into the waters of gold. More gold tailwind?
Mitt Romney has not engaged the gold standard issue, flying outside it and making it, so far, a nonfactor. It would be uncharacteristically reckless for him to repudiate something this popular. This smart, careful, technocrat also seems unlikely to do something as unconventional as to embrace a dollar as good as gold. But … if he doesn’t like the feeling of Herman Cain’s or Newt Gingrich’s hot breath on his neck there might well be nothing better than a road paved with gold to gain a foothold in Iowa. There, last summer, a famous Iowa Tea Party Bus Tour, sponsored by American Principles in Action (in which this writer participated) took the gold standard to 22 towns — to receptive audiences.
Cain has done a certain amount of equivocating on his position in favor of the gold standard. He’s on record as for it, but now under the vaguer formulation that a dollar should be a dollar (as “a rose is a rose is a rose”), but makes demonstrably preposterous claims that a balanced budget is the means to, rather than the outcome of, a stable dollar. That’s exactly backwards and is reminiscent of the 1970s old guard Republicans who held tax cuts hostage to a balanced budget … and who lost to Reagan.
Rep. Paul has the longest track record as favoring the gold standard, yet has refused to campaign on it. For a man of Dr. Paul’s magnificent integrity that’s tantamount to saying that, if elected, gold does not have a place in his already ambitious stated agenda. So…those with the best claim on gold have left it unguarded and vulnerable to a shrewd claim jumper.
Romney and Cain are tied for first. Frontrunners tend to succumb to caution. So what about Perry and Gingrich? Having already, arguably, felt the heady effect of the tailwind from fighting funny money Perry may have developed a feel for the money issue. Now… add Steve Forbes’s endorsement. Perry quickly embraced the flat tax — a signature Forbes issue. Steve Forbes has not one but two signature issues. Forbes made worldwide headlines, recently, with his prediction that we would have the gold standard within 5 years, a very good thing.
Tax cuts, apart from Cain’s controversial 9-9-9, have not differentiated the contenders dramatically. All Republicans are campaigning against tax increases and campaigning for rate cuts. Perry is well positioned, with Forbes’s help, to bring the gold standard, and the elimination of federal taxes on gold to allow people to construct their own golden parachutes out of the deteriorating greenback, to the fore. Will Perry, in for a penny with the flat tax, go in for a pound…with gold?
Meanwhile Gingrich, playing the “tortoise” in this race has pulled ahead of Perry and into third place in the two most recent polls — Fox and CBS News/NY Times. And Gingrich is a famously shrewd strategist—and interpreter of polls. Gingrich is well equipped to register the full implications of Rasmussen’s October Surprise – maybe even this cycle’s version of the Panama Canal Treaty — and to exploit it.
Whoever digs down into the crosstabs will discover another electorally important fact. The gold standard, potentially key to energizing caucus and primary voters, is an asset for the general. This isn’t a desperate primary season expedient which can return to haunt. Rasmussen: “The majority of voters across nearly all demographic groups favor the gold standard if it would dramatically reduce the power of central bankers and political leaders over the economy.” A majority of African Americans, most of them enthusiastically, support the gold standard. A majority of Union members (including this columnist, a member of the AFL-CIO) support the gold standard too.
Gold splits the Democrats’ base There are two major elements of the left. One is made up of elitist, doctrinaire, souls such as Paul Krugman. These are almost all white males of the privileged class: its patriarchy. These, the left’s nomenklatura, almost all ridicule gold. They also, not surprisingly, are a minuscule minority…even of the left.
The nomenklatura have the prestigious platforms –- media, academic perches, money, prestige awards. But they don’t have the votes. Most of the left is made up of humanitarian populists, such as organized labor and ethnics who comprise the “social democratic” left. They are far more concerned about jobs, opportunity, and policies of “rising tide” prosperity than with arcane (and dubious) neo-Keynesian dogma. These — as the Occupy movement is telling us loudly with its many calls for the gold standard — and as Rasmussen now has quantified in his October Surprise — strongly tend to favor gold. The ethnic and labor left leadership is more attuned to the mood of their own, pro-gold, rank and file than are the patrician nomenklatura.
Neither Mr. Bush nor Mr. Obama adopted the kind of economic policies designed to create a robust economy and the jobs that come with that. The Republicans for years have been calling (correctly so) for tax rate cuts and the Democrats have grudgingly gone along, but the jobs do not come. Why not? As compellingly pointed out by Forbes.com’s own John Tamny: the villain is rotten monetary policy.
The gold standard is the, well, gold standard of monetary policy. As noted enthusiastically by The New York Sun and by my colleague Rich Danker in Forbes.com a recipe for how to get there has been laid upon the table by Lewis Lehrman, chairman of the Lehrman Institute (whose website this columnist edits).
Will one or more of the GOP candidates read Rasmussen’s report, parse the implications, consult the gold standard experts, and upset this race? Many gold standard savants are being snapped up: Forbes, now a Perry advisor; Jim Grant, Ron Paul’s announced pick for Fed Chairman; Forbes.com columnist and my co-author of a booklet on the gold standard, Charles Kadlec, a Herman Cain advisor. World-class gold cognoscenti remain, at last report, unpledged, including Lehrman, Sean Fieler (investor and philanthropist who chairs the nonprofit pro-gold American Principles Project which this columnist advises professionally), Atlas Foundation’s Judy Shelton and Professor (and Forbes.com columnist) Brian Domitrovic, among them. The intellectual infrastructure for gold – the knowhow — is there.