The former Alaskan Governor showed sound political and
economic instincts by inveighing forcefully against the
Federal Reserve's latest round of quantitative easing.
According to the prepared text of remarks that she
released to National Review online, Mrs. Palin also
exhibited a more sophisticated knowledge of monetary
policy than any major Republican this side of
Wisconsin Representative Paul Ryan.
--------------------------
Stressing the risks of Fed "pump priming," Mrs. Palin
zeroed in on the connection between a "weak dollara
direct result of the Fed's decision to dump more
dollars onto the market"and rising oil and food prices.
She also noted the rising world alarm about the Fed's
actions, which by now includes blunt comments by
Germany, Brazil, China and most of Asia, among many
others.
"We don't want temporary, artificial economic growth
brought at the expense of permanently higher inflation
which will erode the value of our incomes and our savings,"
the former GOP Vice Presidential nominee said. "We want
a stable dollar combined with real economic reform.
It's the only way we can get our economy back on the
right track."
Mrs. Palin's remarks may have the beneficial effect
of bringing the dollar back to the center of the American
political debate, not to mention of the GOP economic
platform. Republican economic reformers of the 1970s
and 1980sespecially Ronald Reagan and Jack Kemp
understood the importance of stable money to U.S.
prosperity.
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As recently as this week in India, Mr. Obama said
that "We can't continue situations where some countries
maintain massive [trade] surpluses, other countries
have massive deficits and never is there an adjustment
with respect to currency that would lead to a more
balanced growth pattern."
If this isn't a plea for a weaker dollar in
the name of balancing trade flows, what is it?
The world knows the Fed can always win such a
currency race to the bottom in the short run
because it can print an unlimited supply of dollars.
But the risks of currency war and economic
instability are enormous.
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A chance for monetary reform is a
terrible thing to waste.
