A quick followup to yesterday's post noting that the Federal Reserve is increasingly being drawn into political debates from which it had once been able to remain aloof — potentially compromising its independence.
It looks like that process is only going to speed up. Two top Republicans, Sen. Bob Corker of Tennessee and Rep. Mike Pence of Indiana, now want to change the Fed's mission, so that it focuses only on controlling inflation, and not on reducing unemployment. That's in spite of the fact that unemployment is at a whopping 9.6 percent, while inflation remains low.
The proposal comes in the wake of the Fed's effort to jump-start the economy by buying $600 billion worth of Treasury bonds — a move that some have said risks causing inflation to spike down the road.
And of course, as we noted yesterday, Rep. Ron Paul (R-TX), who has called for abolishing the Fed, is in line next year to chair the House comittee that oversees the central bank.
Whatever you think of Corker and Pence's idea, privileging efforts to keep inflation low over efforts to cut unemployment certainly reflects a political viewpoint. So it'll be hard for Fed Chairman Ben Bernanke and co. to avoid getting dragged even further into the political arena in response — whether they like it or not.
(Photo of Bernanke: AP/Dennis Cook)