NEW BRUNSWICK, N.J. – Republican Jeff Bell spent three decades in Washington working on policy and wrote a book promoting all aspects of social conservatism. But so far his campaign for the U.S. Senate has centered on just one issue: returning the United States to the gold standard.
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It's an idea that his opponent, Democratic incumbent Cory Booker, dismisses as "defunct and debunked," which is pretty much how most economists seem to see it.
But a group of conservative thinkers pushing for the change is undaunted.
"It wouldn't be the first time that the majority of Ph.D. economists were on one side and Jeff was on the other and he turned out to be right," said John Mueller, who runs the economics and ethics program at the Ethics and Public Policy Center, referring to the idea that Bell advanced in the 1970s — that cutting taxes could stimulate the economy.
Under the gold standard, the value of the dollar would be fixed to a certain amount of gold.
Through much of the U.S. history, that was the case. But since 1971, the U.S. has had fiat money that is not backed by gold or anything else.
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Bell and other supporters of the gold standard say it would be a way to keep prices stable. He says the current means of controlling prices — near-zero interest rates from the Federal Reserve — is making it hard for small businesses to get loans and expand. Bell says that's a major reason that the economy is growing slowly years after the Great Recession.
"We are in a situation of stagnation," Bell said earlier this month in a speech to a real estate conference in New Brunswick. "Why don't they let market interest rates return to our economy?"
Like other supporters of the gold standard, Bell is an acolyte of Ronald Reagan and Jack Kemp, the late congressman, secretary of housing and urban development and vice presidential nominee who made the call for cutting taxes to stimulate the economy part of a national debate in the late 1970s. Bell, now 70, won the Republican nomination for a New Jersey U.S. Senate seat in 1978 largely by advocating the kind of Reagan-era tax cuts some credit with spurring the economy.
Back in 2012, IGM Forum, which surveys academic economists from U.S. institutions including Yale, the University of Chicago and Stanford, asked panelists whether they agree that the gold standard would mean more employment opportunities and price stability for average Americans. Every member who answered the question disagreed or strongly disagreed with the notion.
Eric Maskin, a Harvard economist who won a Nobel Prize in 2007, was among them. He told The Associated Press, that most in his field believe a gold standard would take away the Fed's monetary policy tool to increase the money supply during recessions and tighten to check fast growth. He also said that the fluctuating value of gold might cause some instability in the economy.
"Non-economists worry about debasement of the currency," he said. "If you're not tied to gold, what prevents a government from printing more and more money and making it worth less? If you have an irresponsible government, that could happen. That's not what our government has been doing."
Bell, at the real estate conference, said limited campaign funds leave him lacking "bandwidth" in the election.
"I can't get across two or three different ideas," he said. So he's focusing on the gold standard as his main one.
It's the main thing he talks about in a radio ad that he used on his way to winning a four-candidate Republican primary and that he dusted off again this month.
In a state where Republicans have not won a U.S. Senate election since 1972, he is seen as a longshot against Booker, a former Newark mayor and fundraising juggernaut.
But early polls have shown Bell trailing by about 10 points — close enough that Gov. Chris Christie, a Republican, has said it should be viewed as a real race. Christie has also appeared at a fundraiser with Bell and said national Republican groups should support Bell.
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