As some of you may have heard, the Congressional GOP leadership, including Senate Minority Leader Mitch McConnell, Speaker of the House John Boehner, House Majority Leader Eric Cantor, and Senator Jon Kyl (a member of the so-called deficit supercommittee) sent a letter to Federal Reserve Chairman Ben Bernanke on Monday, ahead of the two day meeting of the Board Members of the Federal Reserve which began yesterday.
For those of you wishing to read the entire letter (and I suggest you do), here is the text.
In this letter, four senior Republican members of Congress state, in no uncertain terms, that they would like the Federal Reserve Bank of the United States of America to cease and desist any efforts to improve the economy.
Now, there’s a reason the Federal Reserve is not governed by Congress or the White House. The Legislative and Executive branches are political bodies. Fiscal policy, by definition, cannot be subject to the political whims of whichever party is in control of any part of Government at the time. The Congressional GOP leadership has attempted to exert political influence over the monetary policy of the United States by indirectly threatening the Chairman of the Federal Reserve. This is something that is simply not done. This is the equivalent of four senior Republican leaders waltzing into the office of the Chairman of the Federal Reserve and saying “This is a nice office. It’d be a shame if something were to happen to it.” like mobsters running a protection and intimidation racket in a Scorsese movie set in 1930’s Chicago.
Moreover, they weren’t even stealthy about it. They did it in plain view of the public.
What makes it even more unconscionable is that Ben Bernanke is a registered Republican. He was Bush II’s Chairman of the Fed. HE’S THEIR GUY, AND THEY’RE THREATENING HIM.
During Japan’s “Lost Decade”, conservative economist Milton Friedman encouraged the Central Bank of Japan to engage in the kind of quantitative easing that Ben Bernanke is engaging in now. Quantitative easing, for those of you unfamiliar with the term, is when the government buys government bonds from investors, using money the government prints. It increases the overall liquid money supply, and reduces the amounts held in bonds. Now, this strategy does have the issue of potentially causing inflation. Unfortunately, it’s all we have left. There won’t be any additional stimulus packages. Banks are unlikely to begin lending at anything under usurious interest rates any time soon, assuming they’re lending at all. Interest rates are at an all time low. America has among the lowest personal and business taxes in the industrialized world. Yet, the official unemployment rate hovers around 9% (even while the more accurate number is between 15-20%).
The Congressional Republican leadership has just stated that they want the economy of the United States to continue to suck, and will resist any efforts to improve it. Now, they’ve been saying this through their actions for three years, but this is the first time they’ve ever actually written it down for everybody to see. Take a good look, everyone, because this is as close to treason as you get without actually committing it.
