At last night’s 25th anniversary Competitive Enterprise Institute dinner, BB&T chairman and former CEO John Allison gave a rollicking keynote address attacking the bailout, the “misregulation” of the financial industry, and the spirit of “altruism” that he said dominates our politics. But more surprisingly, he also suggested that the Federal Reserve should be replaced with the gold standard and a more privatized banking system.
Afterward, I asked a staffer for Congressman Ron Paul if Allison had been a Paul donor in 2008. “He should have been!” he replied. During that campaign, I was mystified by Paul’s insistence on talking about the Federal Reserve and monetary policy. Although I broadly agreed with his Austrian analysis, it seemed to me that his time would have been better spent emphasizing fiscal policy: the fact that he’d never voted for a tax increase or an unbalanced budget, his opposition to most major spending programs, his support for all of the Reagan and Bush tax cuts.
Yet on the campaign trail, I repeatedly saw kids with pink hair and nose rings shouting, “End the Fed!” Paul himself seemed surprised by the reaction, noting that at one campaign appearance college students started burning Federal Reserve notes (that’s quite a few 25-cent drafts they were sacrificing in the process). The financial crisis has increased the salience of the monetary issue in some quarters. Paul’s bill to audit the Fed now has more than 218 cosponsors — 222 at last count — including members of the House Republican leadership, the head of the Republican Study Committee, and the head of the Congressional Progressive Caucus.