What do the government of China, the government of Germany and the Republican Party have in common? They’re all trying to bully the Federal Reserve into calling off its efforts to create jobs. And the motives of all three are highly suspect. ...Paul Krugman
Inflation is low, "running at just 0.6 percent, the lowest level ever recorded." Republicans like to haul the inflation scare-mask out of the trunk, but they're doing so for political, not economic reasons.
It’s no mystery why China and Germany are on the warpath against the Fed. Both nations are accustomed to running huge trade surpluses. But for some countries to run trade surpluses, others must run trade deficits — and, for years, that has meant us. The Fed’s expansionary policies, however, have the side effect of somewhat weakening the dollar, making U.S. goods more competitive, and paving the way for a smaller U.S. deficit. And the Chinese and Germans don’t want to see that happen. For the Chinese government, by the way, attacking the Fed has the additional benefit of shifting attention away from its own currency manipulation...
China and Germany? Okay. But the Republicans? What are they up to?
Krugman quotes a budget expert who has figured it out. It's simple. It's what Republicans have been doing all along, on just about every issue.
...Budget expert Stan Collender predicted it all. Back in August, he warned Mr. Bernanke that “with Republican policy makers seeing economic hardship as the path to election glory,” they would be “opposed to any actions taken by the Federal Reserve that would make the economy better.” In short, their real fear is not that Fed actions will be harmful, it is that they might succeed.
The Republican party has become the enemy within the gates. They like to use unemployment as a bludgeon when they're out of power. At heart they're not as concerned about unemployment as as long as they're in the money. Unemployment is for suckers.
China and Germany want America to stay uncompetitive; Republicans want the economy to stay weak as long as there’s a Democrat in the White House.
And if Mr. Bernanke gives in to their bullying, they may all get their wish.
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Here's the Republicans' worst nightmare.
"A fiscal program that combines near-term measures to enhance growth with strong, confidence-inducing steps to reduce longer-term structural deficits would be an important complement to the policies of the Federal Reserve," Bernanke said, adding that the Fed is "nonpartisan" and does not support specific tax and spending programs." ... WaPo
No wonder the right is going after Bernanke. Imagine arriving on the doorstep of 2012 with the economy on the upswing!
Sen. Bob Corker (Tenn.) and Rep. Mike Pence (Ind.) have called for the very mission of the Fed to be overhauled. The Fed is charged by Congress with a "dual mandate" of maintaining stable prices and full employment. Corker and Pence argue that the Fed, like many central banks overseas, should focus only on keeping inflation low.
Which, of course, the Fed has done very successfully. There is no inflation issue here. The issue is getting America back to work even if doing so spikes Republicans' hopes that the general misery will last at least two more years.
