To serve effectively in Congress, one does not need a post-graduate degree. When it comes to economics, there's no reason to expect leading lawmakers to be Nobel laureates or be experts in every nuance of complex policies.
But to be taken seriously, policymakers should have some basic understanding of current events, especially if officials hold leadership posts. It's why I've always found it unsettling to see House Speaker John Boehner's (R-Ohio) economic illiteracy on display.
House Speaker John Boehner blamed the markets sell-off Thursday on the Federal Reserve's bond-buying policies. [...]"The sell-off is in large part due to the policies that we've had coming out of the Federal Reserve," Boehner said. "You can't continue to deflate our money and deflate it and deflate it have the equity markets go up without some change."
So, in the Speaker's mind, the major Wall Street indexes took a tumble on Wednesday and Thursday because of the Federal Reserve's quantitative easing.
For everyone in Grown-Up Land, the major Wall Street indexes took a tumble on Wednesday and Thursday because the Federal Reserve signaled an end to quantitative easing. Boehner sees the markets falling and thinks he understands why, but in fact has the entire story backwards.
And if this were just some rare slip-up, it'd be easier to overlook, but the House Speaker has repeatedly demonstrated a profound ignorance on the basics of economic policy. At the height of the global economic crisis in early 2009, for example, Boehner called for a five-year spending freeze and a constitutional amendment to mandate balanced budgets. (At the time, even David Brooks called the idea "insane.")
As unemployment remained high, Boehner's understanding of economic developments seemed to get worse.
In early 2011, shortly after becoming Speaker, Boehner delivered a speech at the Economic Club of New York. Bloomberg News examined Boehner's assessment at the time and found that the House Speaker "built his case on several assertions that are contradicted by market indicators and government reports," which was a polite way of saying, "Boehner's claims contradict every known aspect of reality."
Jonathan Chait took a closer look at Boehner's remarks on tax policy and discovered they were "gibberish." Ruth Marcus scrutinized the speech and discovered that Boehner was relying on an "incoherent, impervious-to-facts economic philosophy."
A few months later, Boehner delivered another speech in which he argued that "job creators in America are essentially on strike" -- even as unemployment was steadily improving -- because employers were disgusted with "out-of-control spending in Washington," even as federal spending was declining.
It was, in other words, demonstrable nonsense.
Again, it's foolish to think the Speaker of the House -- any Speaker of the House -- must have a PhD in economics before holding the gavel, but Boehner seems to lack even a rudimentary understanding of economics, budgets, and monetary policy -- at a time when all of these issues matter quite a bit.
I'm not saying Boehner is subjectively wrong because I disagree with his ideology; I'm saying he's objectively wrong because he has no idea what he's talking about.
For the Speaker to see a steep two-day drop on Wall Street and think to himself, "If it weren't for quantitative easing, this wouldn't have happened," is alarming.