The Wall Street Journal has an excellent editorial ($) this morning on the Fed's recent mismanagement of the country's monetary policy. Their solution? While they don't explicitly endorse a return to the gold standard, they recommend the "price rule". By adhering to this rule, the Fed would adjust the money supply based on the movements of actual market prices of durable commodities (including, almost certainly, the price of gold).

This is a great idea that is long overdue. There are two levers that the government controls which affect the economy - fiscal policy and monetary policy. The latter is, for all intents and purposes, a socialist operation where a handful of government officials (the Fed) try to determine what the market itself can so easily project.

The foundation of a sound economy is a sound and stable dollar. And the quickest we can get there is through the gold standard. It would shepherd in a new plateau of prosperity - commerce would increase, trade would expand, and most importantly, it would handcuff spendthrift politicians.

While current economic conditions aren't unstable, we should make the switch immediately, before an easy-to-avoid financial calamity rears its ugly head.

PS...it's about time the Fed also re-examined the weaker half of its silly dual mandate, which is to strive for "full employment". The Fed's first and last duty should be to achieve price stability. That would be a good target for the WSJ editors to castigate tomorrow.