Ralph Benko

One of the latent issues of the 2012 presidential race is a referendum on the Bernanke Fed. If Romney is in, Bernanke is out. Jeffrey Bell, a colleague at American Principles In Action and a high octane analyst, observes, “It is crucial for Romney to invite Mr. Bernanke’s resignation immediately upon his inauguration rather than allowing him to serve out the remaining year of his term. There are substantial lags between changes in monetary policy, their effects on the financial markets, and their even later impact on the real economy. By replacing Bernanke immediately Romney would seize an invaluable opportunity to front-load an economic growth turbocharger, reaping dividends during his first administration….”

Pledging to replace Bernanke immediately during the campaign could dominate a news cycle. And the idea is not far afield. On October 1, in Romney Bashing Bernanke Rejects Adviser Mankiw’s Policy Views , Bloomberg News’s Joshua Zumbrun quietly dropped one of the biggest scoops of 2012:

Oct. 1 (Bloomberg) — Mitt Romney is shunning the monetary policy views of one of his top advisers, Harvard University’s Greg Mankiw, who has expressed support for Federal Reserve Chairman Ben S. Bernanke and his record stimulus.

Instead, the Republican presidential candidate has criticized the Fed in ways that echo the opinions of another adviser, John Taylor. The Stanford University professor and former Treasury Department official has said the Fed’s large- scale asset purchases risk debasing the dollar while failing to alleviate unemployment.

If Romney wins the presidency, Zumbrun’s scoop could be pivotal for investors. It also provides a crucial glimpse into the prospects for the re-ignition of job creation and American prosperity.

Most of the financial and political media remain fixated on the conspicuous issues of the “fiscal cliff” — histrionic Washington jargon for federal profligacy and anemic tax revenues. Meanwhile, ranking House colleagues of Paul Ryan, including JEC Vice Chairman Kevin Brady and Republican Study Committee Chairman Jim Jordan, press good money — monetary reform — as central to restoring economic growth.


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.