US

Five questions with economist Allan Meltzer

Jamie Weinstein Senior Writer

Allan Meltzer is a visiting scholar at the American Enterprise Institute and a professor at Carnegie Mellon’s Tepper School of Business.

A renowned economist, Meltzer is in the process of writing what many already consider the most definitive history of the Federal Reserve. Volumes I and II of his “A History of the Federal Reserve” have already been released.

On Wednesday evening at the Kennedy Center in Washington, D.C., Meltzer will be among four recipients of the 2011 Bradley Prize, which has been compared to the MacArthur “genius grant” for conservative and libertarian thinkers and leaders. The prize comes with a $250,000 cash award.

In the days leading up to Wednesday’s ceremony, The Daily Caller will be publishing interviews with this year’s recipients, who beside Meltzer include former Florida Gov. Jeb Bush, Harvard Government Professor Harvey Mansfield and New York University Law Professor Richard Epstein.

TheDC: You are one of the foremost experts on the Federal Reserve, having written a multi-part history of the institution. What do you make of Texas Republican Rep. Ron Paul’s criticism of the Fed? Would it be problematic if Ron Paul got his way and the Fed was actually eliminated?

Allan Meltzer (AM): What would take the place of the Federal Reserve? Rep. Paul favors a gold standard. We do not have a gold standard because the public everywhere does not favor making a fixed gold price more important than lower unemployment. Further, a unilateral commitment to a gold standard would subject our economy to shocks occurring anywhere in the world. Japan’s nuclear problem is one of many examples that changes exchange rates. If people anywhere wanted to buy gold, we would be obligated to sell it. That would be deflationary for us.

TheDC: How serious is America’s debt problem? What do you think of Republican Wisconsin Rep. Paul Ryan’s plan to solve it?

AM: The debt problem is very serious because the growth of debt is unsustainable. Congressman Ryan’s plan recognizes that the largest part of the problem comes from Medicare and Medicaid and offers a solution.

TheDC: Are there any candidates who are likely to run in 2012 that impress you and that you may consider supporting?

AM: I have chosen not to work in political campaigns.

TheDC: What three books most influenced your worldview?

AM: Karl Popper’s “Open Society and Its Enemies,” Milton Friedman’s “Capitalism and Freedom,” Friedrich Hayek’s “The Constitution of Liberty.”

TheDC: Does winning the Bradley Prize mean anything special to you? Do you have any thoughts on your fellow prize recipients?

AM: The Bradley Prize is a signal honor. I know and respect several past recipients and am proud to join them.