Kemp eyes currency for all of Americas: Envisions hemispheric parallel to euro.(Nation)

Jack Kemp wants a single currency for the United States and the 33 other nations of the Western Hemisphere.

The former congressman, housing secretary under President Bush, and 1996 GOP vice presidential nominee is touting his idea as the foundation for a low-tariff trade zone from the Arctic Circle to the tip of Tierra del Fuego.

"There would be a common currency linked to the U.S. dollar, and you'd have stable exchange rates as a result," says Mr. Kemp, who first sought the Republican presidential nomination in 1988 and is considering a 2000 bid.

The currency idea sets Mr. Kemp apart in the large field of Republicans itching to make a White House run in three years.

But to some observers, the very words "common currency" smack of world government and the European Community's "euro," the new single currency that by 1999 is supposed to replace the French franc, Italian lira, German mark and other continental currencies.

For many in the political world, the Kemp idea is either lovable or laughable. For some, it's both.

"It may be a splendid idea that could usher in a new millennium of hemispheric or even global prosperity, but I don't see how you campaign on it," says Roland Gunn, a computer-industry lobbyist and former GOP congressional aide. "How do you keep people awake while you explain it?"

Rep. Mark Sanford, a South Carolina Republican and member of the Joint Economic Committee, says, "It doesn't strike me as something that would be politically viable in Congress. Both ends of the political spectrum like national sovereignty, and this would be seen as a threat to sovereignty."

Mr. Kemp does not appear to be wedded to the creation of a new single currency for the hemisphere.

Ask him if a pack of gum bought in Fairfax would require payment in U.S. dollars or a new common currency and he says, "If someone had a peso in Argentina and it were linked to the dollar, then you wouldn't care if it's a peso or a dollar."

Does that mean he really wants to see the dollar no longer printed and a new hemispheric money in its place? "No, I am very much for the sovereignty of the American dollar," he says.

Mr. Kemp, long a student of monetary policy, believes the United States and the entire hemisphere would see profound benefits from his proposal.

"A hemispheric free-trade zone would allow goods and services to cross borders [more freely] from the tip of Chile to the top of Canada," he says. "It would expand the growth of our economy and theirs."

He also says "part of our hemispheric immigration problem is related to the economies of some parts of Latin America."

If the dollar were linked to a modern version of the gold standard, every North, Central and South American country would peg its currency to the dollar, he argues. The resulting economic growth would mean fewer of their nationals would seek jobs in the United States through legal or illegal immigration.

"It's not the only answer, but part of the answer," he says.

But Mr. Sanford, a former investment banker, counters, "The South American currencies already are pegged to our dollar."

Economist Lawrence Kudlow, whom Mr. Kemp often cites, agrees and says that Federal Reserve Board Chairman Alan Greenspan already has linked the dollar unofficially to an updated form of the gold standard.

Whether Mr. Kemp's single-currency idea makes a suitable centerpiece for a presidential campaign platform is another matter in the view of some GOP leaders.

"It might appeal to the sophisticated businessmen who has an interest in foreign trade," says David Opitz, Wisconsin's Republican Party chairman. "But for the mainstream voter we have to appeal to, perhaps we have to have a more mainstream message, like a flat tax or eliminating the IRS."

Still, for Mr. Kemp, his common-currency idea constitutes a big-picture approach.

He says, "It is going to take leadership from the U.S., because only we can provide the leadership to re-establish a hemispheric and global monetary regime in which there is stability, credibility and integrity for our currency."