The best piece we’ve read so far on the coming presidential campaign is the editorial in the Wall Street Journal this morning on how Governor DeSantis is teeing up the issue of the failures of monetary policy and the Federal Reserve. The editorial is pegged to recent remarks of Mr. DeSantis in Florida and Pennsylvania. It runs in the Journal under a headline saying, “DeSantis Aims at the Federal Reserve.”

Our own advice to Mr. DeSantis is to lift his sights. It’s not that we disagree with the Journal’s scoop or Mr. DeSantis’ critique of the Fed. We agree with both. Yet in our view it would be an error for Mr. DeSantis to run his campaign with a focus on the Fed. He’s not going to be running, after all, for president of the central bank. He’s running to be president of America.  So he is going to have to aim high.

As in, focus on Congress. It is to Congress that the Constitution grants the monetary powers of the United States government. Those powers include the power to tax, to regulate commerce between the states (and the Indian tribes and foreign countries), to coin money and regulate the value thereof, and of foreign coin, and to fix the standard of weights and measures. Plus, the power to punish counterfeiting.

Congress is granted every one of those powers. It might have been logical for it to create a central bank — at least when the dollar was defined in American law, as it was before the Federal Reserve was created in 1913. Then the definition of a dollar was a bit more than 20th of an ounce of gold. The Congress felt so strongly on this head that it refused to create the Fed until gold convertibility was made part of the law.

As the Federal Reserve Act was making its way through the Congress in 1913, the Sun was among those warning of “the danger which is pending in the currency bill.” Under the “gold standard act of 1900,” the Sun’s editors wrote, “the Secretary of the Treasury is charged with the duty of keeping all forms of money in the country as good as gold.” Yet the editors feared that the proposed central bank would evade gold convertibility.

The loophole the Sun feared had to do with “lawful money,” the notion that Federal Reserve Notes could be redeemed not in gold but in other paper tender. “Sentiment” had preserved “the gold standard act to date,” the Sun said, “but what part will sentiment play if a new currency bill is passed effecting a substantial departure of the gold standard by providing for a limitless emission of Government paper redeemable in lawful money?” 

It would prove to be a prescient warning, especially after FDR’s 1933 devaluation of the dollar and Congress even barred Americans from owning gold. The Bretton Woods agreement later restored a tenuous link between the dollar and gold, pledging America to redeem dollars presented to it by foreign governments in gold at a 35th of an ounce, but when President Nixon abrogated that pact, the age of the fiat dollar began.

To those who suggest that Congress is not there, not ready, or not willing to address the crisis precipitated by fiat money, we say, that is a matter of leadership. Which, in our view, is not going to be cured by politicians, as fine a one as Mr. DeSantis is, kibitzing the Fed. The Congress is what put us in this predicament, and it is the Congress — and President — that will have to extricate us from it.