September 21, 2011
Why did the GOP congressional leadership send a snail-mail missive to Federal Reserve Chairman Ben Bernanke? Haven’t they gotten the news about “e-mail”? Do they need pen pals that badly? Do they need a loan? Or what?
Imagine, these legendary GOP lunkheads suddenly looking for “ample data,” “quantifiable benefits,” “measurable outcomes,” and . . . evidence! Characteristically, in their letter below, they offer none of those to back up their assertions about the effects of Fed policies. They offer nothing but naked – and uncharacteristically weaselly – claims that “the Federal Reserve’s actions have likely led to more fluctuations and uncertainty in our already weak economy,” and “further intervention by the Federal Reserve could exacerbate current problems or further harm the U.S. economy.”
It’s not surprising this Gang of No would “instruct” the Fed this way. They speak for the bigger gang of GOP/TP Fed haters. In good times and in bad times they detest the Federal Reserve. Now, however, having consciously slowed the economy by blocking any meaningful – and temporary – fiscal stimulus, they must kneecap the Fed. And now. Why? To cut off monetary stimulus as well. They cannot win the White House in 2012 without a substantially weakening economy between now and November 2012. Moreover, the blatant, if hamfistedly muted, threat against Bernanke and the Fed inherent in their letter is as subtle as a Hustler billboard in Vatican Square.
One wonders, are they playing chicken with a depression? Are they actively courting one for political purposes alone? It seems unlikely to seek economic catastrophe, but, recall, they are batsh*t crazy. We ought never underestimate batsh*t, or crazy. Here’s their cris de coeur, dated September 19, 2011:
“Dear Chairman Bernanke,
It is our understanding that the Board Members of the Federal Reserve will meet later this week to consider additional monetary stimulus proposals. We write to express our reservations about any such measures. Respectfully, we submit that the board should resist further extraordinary intervention in the U.S. economy, particularly without a clear articulation of the goals of such a policy, direction for success, ample data proving a case for economic action and quantifiable benefits to the American people.
It is not clear that the recent round of quantitative easing undertaken by the Federal Reserve has facilitated economic growth or reduced the unemployment rate. To the contrary, there has been significant concern expressed by Federal Reserve Board Members, academics, business leaders, Members of Congress and the public. Although the goal of quantitative easing was, in part, to stabilize the price level against deflationary fears, the Federal Reserve’s actions have likely led to more fluctuations and uncertainty in our already weak economy.
We have serious concerns that further intervention by the Federal Reserve could exacerbate current problems or further harm the U.S. economy. Such steps may erode the already weakened U.S. dollar or promote more borrowing by overleveraged consumers. To date, we have seen no evidence that further monetary stimulus will create jobs or provide a sustainable path towards economic recovery.
Ultimately, the American economy is driven by the confidence of consumers and investors and the innovations of its workers. The American people have reason to be skeptical of the Federal Reserve vastly increasing its role in the economy if measurable outcomes cannot be demonstrated. We respectfully request that a copy of this letter be shared with each Member of the Board.
Sincerely, Sen. Mitch McConnell, Rep. John Boehner, Sen. Jon Kyl, Rep. Eric Cantor”