I cannot find anything written on Ramaswamy’s home page about the Fed, but this from the Washinton Examiner is consistent with a video he posted.
“Ramaswamy insists he supports congressional legislation to abolish the [Fed’s] dual mandate, replacing it with the single mandate of dollar stability "versus a basket of commodities," including gold, silver, nickel, and a range of agricultural commodities.
Let’s take this literally if not seriously. What would it mean in practice? It could mean legally defining the dollar as x grams of gold, y grams of silver, z grams of nickel, q kilos of wheat (of defined characteristics), etc., analogously to the way the dollar was once defined as 0.048379 oz. of gold. This would have the effect of legislating the relative prices of the commodities in the basket. Since that is too inefficient for words let’s assume that Ramaswamy means that the Fed will have a legal obligation to maintain (withing some reasonable bounds, I suppose) an index of the prices of the commodities in the basket. This is not all that different from the same obligation with respect to an index of all the goods and services in the PCE, the index the Fed currently uses, or the CPI, or any other index of almost everything. [The GDP deflator would be another index.]
The major difference with regards to the present system appears to be that the Fed’s obligation would be to prevent the index from moving (much) up or down, whereas now the Fed supposedly targets the PCE index to increase by 2% p.a. on average. But the Fed could be instructed to prevent the PCE (or some other index) from moving up or down as well. It’s really hard to understand why targeting a narrower index would be superior (although it would be superior to holding the price of gold stable). It certainly would not prevent inflation or deflation of the broader indexes as relative prices of the commodities in the basket rose or fell in relation to other prices of the economy. It seems to me that Ramaswamy’s proposal is just an inferior version of average inflation targeting with a target of zero.
In the video – I guess not having a white paper is a generational thing I shouldn’t hold against him – Ramaswamy gives evidence of understanding why inflation has real costs. That is, he really understands (he is not just repeating what he heard from someone who heard from someone) how inflation (and by the same logic deflation, too) interferes with market participants finding an income-maximizing set of relative prices. I sort of wish I could sit down with Ramaswamy to try to persuade him that when not all prices adjust as easily downward as upwards, zero is not the target that best enables market participants to find that income-maximizing set of relative prices. [And THEN persuade him that when the economy is subject to major shocks (that require major changes in relative prices) that the Fed should be “flexible” by temporarily allowing inflation greater than the average target: Flexible Average Inflation Targeting.]
As long as I’m being charitable, and I think one ought to be charitable with a politician that does not have a track record of obstinate error, let me mention two other positive aspects of Ramaswamy’s video. First, he does not ascribe inflation to fiscal deficits; he does not even mention them. This all by itself, if we are grading on the curve, deserves a “Pass” on microeconomics. Second in his criticism of the Fed, he accuses it of treating wages as what needs to be tamped down, playing “whack a mole with wages." This is not quite right, but not too far off, especially if we are looking at the Bernanke-Yellin Fed. And, extra credit, he not only criticizes the idea of the Philips Curve but alludes correctly to the nationality of A.W. Philips (a Kiwi).