Liberals cry foul after top Republican leaders urge Fed Chairman Ben Bernanke not to use monetary policy to help juice the sputtering economy
The top four Republicans in the House and Senate sent Federal Reserve Chairman Ben Bernanke a letter this week expressing their "serious concerns" about the Fed's plans to administer further monetary stimulus to juice the stalled economy. The Fed should "resist further extraordinary intervention in the U.S. economy," they advised. (The Fed ignored the GOP and approved a plan to buy $400 billion in long-term Treasury bonds by selling shorter-term T-notes.) Liberals have pounced, accusing the GOP of trying to undermine the economy for political gain — the theory being that if the economy improves, so do President Obama's chances in 2012. "I realize the term 'economic sabotage' is a loaded one," says Karoli Kuns at Crooks & Liars. "But what else do you call this?"
This is obviously economic sabotage: Blocking every single one of President Obama's proposals to boost the economy has worked out pretty well for the GOP, says Andrew Sullivan at The Daily Beast. And with this Bernanke letter, "I think it's now fair to say that they are even attempting to intensify the slowdown by intimidating the Fed from doing its job." Trying to "sabotage economic growth for short-term political advantage" is a pretty shocking new low — even for the Party of No.
But Republicans do have a point: Anyone who thinks it's shocking for congressmen to lobby the Fed "must not follow politics very closely," says David Indiviglio at The Atlantic. There may be a 2012 angle here, but Republicans also believe the Fed's recent money-printing has had no "meaningful positive impact on the economy" — and actually, "the statistics back them up." Their concerns about inflation and a weak dollar are iffier, but none of this matters: As the Fed showed, it can just ignore them.
"The GOP is trying to sway the Fed. So what?"
Even if it's attempted sabotage, it could backfire: The implied threat in this letter — "Nice central bank you got here. Shame if something should happen to it" — could blow up in the GOP's face, says Ezra Klein at The Washington Post. Assuming that a weak economy would help a Fed-hating "hardliner" like Rick Perry beat Obama — and that Bernanke would rather not have such an enemy win the White House in 2012 — wouldn't the Fed chair "be wise to do whatever he can to help the economy"? Luckily, "that's his job anyway."
"Nice central bank you got here. Shame if something should happen to it."
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