Ron Paul's emergence as the new GOP frontrunner in Iowa has many clamoring to slap the not-Mitt mantle upon the Texas lawmaker's brow. But political pundits and voters should pay greater heed to his sudden rise. The anyone but Romney title downplays Paul's emergence, writing him off as just the latest in a string of candidates-du-jour. But Ron Paul is more than a fling.
The Texas Republican is the next logical step in the GOP's steady march to Libertarianism. After the Tea Party's 2010 sweep of the midterm elections, who else could Republican voters adore with more fervor than the founder of the movement, a man determined to obliterate government down to its very bones, then pulverize the remainder to render it wholly meaningless? Ron Paul isn't the great Republican hope, the champion of small government or a candidate preaching reason. Ron Paul is a pirate.
How else would you describe an anti-authoritarian precious metal fetishist with a maniacal disdain for any sort of excise on earnings that advocates quack medicine? A man who, if given the chance, would eliminate every agency that protects Americans from their own cupidity? Ron Paul's pirate economy will shrink government into a non-functioning entity, opening the floodgates for every miscreant who prays for nothing more than a lawless land begging to be raided and pillaged; the nation left a wide open sea of bountiful profits with not a single buffer of federal interference.
What Ron Paul's America Would Look Like
Ron Paul 2012? Republican voters appear willing to walk the plank. But take a look at what life could be like after hypothetical President Ron Paul places his hand atop The Bible and takes the oath of office.
In Ron Paul's America, your boss could feasibly pay you in bags of gold -- albeit very small ones.
Paul's insistence upon a gold standard is caged in innocuous terminology. Legalizing sound money, so the government is forced to get serious about the dollar's value. It disguises a belief that a U.S. Federal Reserve Bank guiding monetary policy is the bane of a truly free market society. The reality accepted by most economists -- those without considerable holdings in the gold market like Paul -- is the move away from the gold standard has saved America's hindquarters from a severe thwacking several times since the Great Depression. The Fed, as much as Paul counters, keeps the economic gears greased for consistent growth.
A flexible Fed, human as it may be, is able to adjust interest rates to guide inflation or deflation to match market realities. Yes, it has its fallibilities, as Paul is quick to point to the current national debt and cash printers set to always on (the Fed does not actually print money. Paul has done nothing to stop the misconception that Ben Bernanke's office includes an inkjet printer spewing out Benjamin Franklin's at will). But his argument rests largely with an anti-inflationary stance that does not match reality, given how quantitative easing has actually played out.
Hyper-inflation that would lay the dollar's value to waste: that's what we were trained to fear as the Fed announced another round of quantitative easing to increase the monetary base and stabilize financial markets. In reality, inflation has grown about 3.6 percent in past 12 months as mesaured by the consumer price index (CPI), far from the wheelbarrows of cash we expected to take to the grocery store to buy a can of Coke. Exclude the often-volatile food and energy component, and core-CPI is running at a relatively stable 2.1 percent over the past year -- not exactly runaway inflation -- despite massive quantitative easing. Now imagine what would have happen to prices (and commerce) without quantitative easing. You guessed it: deflation, and quite possibly depression, due to substantial asset and wealth destruction triggered by the 2007-2009 Great Recession. This may seem foreign to the Paul-ite sect, and for good reason. Ron Paul never mentions the asset destruction that took place from 2007-2009 -- it would discredit his hyper-inflation hysteria.
Though it could have been worse is never a winning argument, expanding the nation's monetary base saved the U.S. from a veritable plunge into chaos -- a practice which has been credited with also helping the nation eek out of the Great Depression itself.
In fact, it was the wholly unexpected influx of gold that allowed for the fiscal expansion that ended the Depression. Consider it Quantitative Easing: Precious Metals Edition.
Plausible estimates of the effects of fiscal and monetary changes indicate that nearly all the observed recovery of the U.S. economy prior to 1942 was due to monetary expansion. A huge gold inflow in the mid- and late-1930s swelled the money stock and stimulated the economy by lowering real interest rates and encouraging investment spending and purchases of durable goods, wrote U.C. Berkeley Prof. Christina Romer in a 1992 paper.
More recently, the New York Fed, in a paper authored by Gauti B. Eggertsson, argues it was President Franklin Delano Roosevelt's removal of the Gold Standard and nod to expansionary fiscal policy that got the gears of the economy moving again.
Paul's answer would have been to marry the nation's currency to a commodity that lives and dies with the luck of the mining industry. (Thankfully, modern medical advances have largely eliminated the potential for dentists affecting the value of American currency by using gold filings, and making a person's mouth a worthy stage for robbery).
Yes, Paul Owns A Lot of Gold
Give Paul credit where it is due: his money rides with his policy positions. The Congressman currently holds anywhere from $1.6 million and $3.5 million in gold mining stocks. Of course, in any other case, voters would rightfully throw a weary glance at a politician advocating a position that would benefit said politico directly.
Paul's policy would go so far as to allow private companies to dictate the printing of currency by... essentially allowing them to print their money. Obviously the currency would have to be backed by actual holdings, but gold certificates could enter into the lexicon.
It doesn't have to be the government. I actually believe in the free market thinking: the private companies could do it, Paul said in an interview with thestreet.com.
The Texas lawmaker's advocacy of what John Maynard Keynes termed a barbarous relic is not the only blast from the past he peddles.
In Ron Paul's America, the dope is legal but the milk could kill you.
Paul sits among the few lawmakers to introduce bills in Congress that would end the prohibition of marijuana. It has won him a certain fan base among the bong-ripping free spirits roaming college campuses, as well as a particular sect of baby boomer. It gives libertarianism's free-from-government mantra a positive spin, eliminating regulations that do not make fiscal sense. But Paul takes it a bit too far.
When Louis Pasteur, famed French chemist and microbiologist, developed the eventually-eponymous breakthrough in removing the nastier parts of raw milk, he had no intention of inducing an anti-big-government convulsion. Quite the contrary, pasteurization has arguably saved countless lives and prevented untold tummy aches worldwide since it's inception.
According to the Centers for Disease Control, raw milk led to 86 cases of food poisoning, 1,676 illnesses, 191 hospitalizations and two deaths. According to the CDC's Dr. Hannah Gould, raw milk causes nearly three times as many hospitalizations as any other food-related ailment.
The stipulation that milk be pasteurized only exists in 20 states, and yet Dr. Paul has taken the time to make it a key exemplar of his anti-government policy. Any interference big brother makes between the udder and your glass is an imposition of your rights, according to Paul. But his argument misses the point that some regulations, at their heart, protect consumers from themselves, the ills of profiteering, and serve the greater good. This is called the theory of the positive state -- government as an agent of the good. Most Americans understand the concept. Ron Paul flatly rejects it like sour milk.
The same goes for Dr. Paul's fervent support of alternative medicines, which seems to appeal to the same weed-legalizing crowd. Early logs and manuals show sailors and pirates had medicine cabinets filled with rosemary, mint, sage, thyme, juniper and St. John's Wort. It sounds like a veritable duplicate of any modern alternative medicine cabinet's staples.
Of course, the efficacy of any of these herbal remedies has yet to pan out in medical and Food and Drug Administration tests, yet Paul wants to stop the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) from interfering with Americans' knowledge of and access to dietary supplements and alternative treatments.
Of course, should granny get sick from the milkman's delivery and the alfalfa doesn't cure her, she might as well just die.
In Ron Paul's America, the aging and poor should fend for themselves.
Ron Paul Would Seek to End Social Security, Medicaid
The good doctor believes Social Security, Medicare and Medicaid programs are unconstitutional. Of course, he refuses to actually say he'll throw kids, the less-monetarily endowed and the aging off of the government healthcare dole (nudge nudge).
All of this makes sense when Paul eliminates the income, capital gains and death taxes, leaving most government programs untenable. That will obviously end any hope for reviving education, but who the heck cares when Paul will give out tax credits to parents for homeschooling their children (though what taxes they'll be paying in the first place is not exactly clear). Throw in Paul's affinity for opening up any water (or land) imaginable to oil exploration while advocating gun rights at every level and you have a ripe sense of where the good doctor sees our country headed.
A nation of gun-toting, homeschooled loons ready to pay for a glass of possibly hazardous refreshment with pure gold after spending a day exploring the seabed for more crude. Hopefully Republican voters rethink where they bury their voting treasure before it's too late.