Interesting political debates typically have what could be called primary effects. In Wednesday night's case, those would include the Bush-Rubio exchange, which did a lot of good for Rubio and a lot of damage to Bush, and the Cruz assault on the moderators, which was dazzling.
But there are also answers and exchanges that only become important later on, perhaps in the next debate. You might say these are moments (potentially) have major secondary effects. There are a couple of them lurking in the transcript of Wednesday's debate. One in particular struck me.
Rick Santelli asked Ted Cruz about the Federal Reserve. Here's the heart of Cruz's response:
The second thing we need to do is I think we need to bring together a bipartisan commission to look at getting back to rules- based monetary policy, end this star chamber that has been engaging in this incredible experiment of quantitative easing, QE1, QE2, QE3, QE- infinity.
And the people who are being impacted, you know, a question that was asked earlier, Becky asked, was about working women. You know, it's interesting, you look at on Wall Street, the Fed is doing great. It's driving up stock prices. Wall Street is doing great.
You know, today, the top 1 percent earn a higher share of our income than any year since 1928. But if you look at working men and women. If you look at a single mom buying groceries, she sees hamburger prices have gone up nearly 40 percent.
She sees her cost of electricity going up. She sees her health insurance going up. And loose money is one of the major problems. We need sound money. And I think the Fed should get out of the business of trying to juice our economy and simply be focused on sound money and monetary stability, ideally tied to gold.
I was sympathetic to and impressed by Cruz's response. First, monetary policy is a topic that deserves to be discussed in the presidential race; both judging the zero-interest rate regime and the question of what should guide monetary policy going forward are fundamentally important. And second, as something of an amateur gold bug, I found it exciting to hear Cruz follow in the footsteps of Ronald Reagan and Jack Kemp and go beyond advocating sound money and monetary stability to mentioning gold. I personally am inclined to believe the gold standard fits into a constitutionalist (in the broad sense) vision of limited and constrained government, and would like to see a dollar once again as good as gold.
But whatever I believe, this is a controversial position, one that many elite economists not just on the left but on the right disdain. Cruz has said something on which he'll be challenged and attacked. If he defends himself ably and elaborates on his understanding, it could be a defining moment for his campaign, where he moves beyond being a very skilled but somewhat formulaic conventional conservative to a risk-taker with a controversial big constitutional and economic idea. If he flubs his defense, or backs off, he'll be damaged. I assume Cruz knows that, and that he's meeting with people like Lew Lehrman and Jim Grant and Jeff Bell to discuss the risk and the opportunity he seems to have embraced going forward. Meanwhile, it will be interesting to see what other candidates say on this slightly esoteric but actually quite revealing and also explosive issue.