The Federal Reserve Board is meeting again this morning to discuss what it could do to spark demand in America’s stagnant economy. But today Republican leaders have taken the extraordinary step of writing to Fed Chair Ben Bernanke, asking him to let the economy flounder:
Even though the financial markets have been counting on the Federal Reserve to take action, Republican Congressional leadership sent a letter to the Federal Reserve chairman on Tuesday evening urging it not to engage in further stimulus. […]
With unemployment at 9.1 percent and Congress unable to agree on fiscal policies that might encourage job creation, many advisers have been calling on the Fed to continue using whatever ammunition it has left.
The Federal Reserve is an independent body whose decisions do not have to be ratified by the president or Congress, and efforts to influence monetary policy are discouraged to maintain its credibility.
“Even if I agreed” with the Republican letter, Tony Fratto, a former adviser to President George W. Bush, wrote in a Twitter post, “I’d still disagree with the effort to put public political pressure on Bernanke.”
It’s no mystery what Republicans are doing here. Sen. Mitch McConnell (R-KY) has said the GOP’s top goal is defeating President Obama in November 2012. Republicans know they worse the economy is, the better their chances of defeating President Obama. So Republicans are doing whatever they can to stop the Fed from improving the economy, American suffering and political tradition be damned.
The mystery? That every reporter in Washington knows all of the above, but they won’t say any of it out loud. Instead, we get he said, she said reporting – “Lots of people want the Fed to do something, Republicans don’t, who can say why or who’s right? We’ll have to leave it there.”
UPDATE: The Fed has ignored GOP pressure and moved to get the economy growing again.