Republicans and the Fed
In the category of bald faced hypocrisy, this week’s attempt by the Republican Congressional leadership to strong arm the Fed, must surely scale new heights. Here’s the Associated Press story:
WASHINGTON (AP) ‰ÛÓ Republican leaders of the House and Senate are urging Federal Reserve policymakers against taking further steps to lower interest rates.
On the eve of the Fed‰Ûªs two-day policy meeting, the leaders sent a letter to Fed Chairman Ben Bernanke warning that the Fed‰Ûªs policies could harm an already-weak U.S. economy.
The letter, sent Monday, was signed by Senate Republican Leader Mitch McConnell of Kentucky, Senate Republican Whip Jon Kyl of Arizona, House Speaker John Boehner of Ohio, and House Majority Leader Eric Cantor of Virginia.
The letter followed criticism from several Republican presidential candidates that the Fed efforts to boost growth are raising the risk of inflation.
‰ÛÏThe American people have reason to be skeptical of the Federal Reserve vastly increasing its role in the economy,‰Û? the lawmakers wrote.
It is rare for lawmakers to try and sway policy action at the Fed, which operates independently of Congress and the White House. It was also sent at a time when Bernanke, a Republican, has faced growing criticism from members of his own party.
Former Fed official Joseph Gagnon, senior fellow at the Peterson Institute for International Economics, called the letter ‰ÛÏoutrageous. It‰Ûªs incredible.‰Û? He said it‰Ûªs been several decades since such high-level politicians tried so directly to influence the Fed.
‰ÛÏThe fact that it‰Ûªs in print and signed by the leaders of the House and minority leaders of the Senate raises it up a notch,‰Û? Gagnon said.
David Jones, head of consulting firm DMJ Advisors and the author of four books on the Federal Reserve, said he cannot remember another time when members of Congress had made such a direct approach to the Fed in the week that the central bank was meeting.
Digest that all slowly it might make you ill.
What we have in this communication is an expression by one of our two major political parties that the Fed, whose mandate extends to limiting unemployment and keeping inflation within bounds, should not exert itself to do either such thing. It should, according to the GOP leaders, do nothing.
Nothing, that is, to help the economy.
Read that again to make sure you have the story correct.
The Republicans want the Fed to sit idly by and let the economic malaise linger. They want unemployment to stay where it is. They want no action on inflation. This amounts to a desire to have the economy fester, to have households suffer, and to have businesses lose profit.
This nakedly political request is sickening. And it is deeply disturbing. It means that the Republicans really meant it when they said their goal was to defeat Obama. It means that all their posturing to offer policies to improve the economy was a sham. It means they would prefer decline and loss over recovery and profit. It means they have abandoned any pretense to being a loyal opposition, for this is profoundly disloyal. It is borderline treason, if by that word we mean acting against the national interest.
What the GOP leaders have done is to make clear that their interest – winning the next election – is more important to them than solving the nation’s economic problems. What is good for America is not good for the Republicans. And vice versa.
Now many of you are Republicans: are you not ashamed of this display of disloyalty?
Are you not sickened by the cynicism?
Are you not disgusted by what amounts to an open revolt against our national wellbeing?
It is all well and good to debate the Fed’s role, or to discuss the efficacy of what it does. Those activities fall within the realm of loyal and open discourse. But urging it to take no action to help us, when it is clearly a major aspect of the Fed’s reason for being to do just that, is completely out of bounds.
Obviously the Republican intention is to halt all attempts to kick start the economy. Having stymied any implementation of fiscal stimulus, and now well down the road with anti-social, anti-growth austerity measures – both at the Federal and State levels across the country – the GOP, if it is to starve the economy completely, needs to make sure that monetary policy is also neutralized. So they are asking Bernanke to join them in their brazen disloyalty and anti-American positioning.
Did they adopt this attitude during the Bush years? Did any of these same leaders speak up against the enormous devaluation of the dollar during the Bush regime’s tenure? Did they criticize the over-accomodating stance that led to the bubble? Of course not. That would require consistent economic thinking rather than the twisted cynicism of modern Republican politics.
Is there a more benign explanation? I don’t think so. This was pure politics. Disloyal politics. Disloyal to America.
The GOP is exposed.
I wonder if voters will notice.
