In about an hour, the Federal Reserve is expected to announce some kind of strategy for the near future -- possibilities range from doing nothing to an expansive intervention -- with Fed Chairman Ben Bernanke scheduled to speak at a news conference at 2:15 p.m.
Given how little the Fed has done, and how willing Bernanke & Co. have been to let the weak recovery trudge along, many on the left have accused the Fed chairman -- a Republican originally appointed by George W. Bush -- of having partisan motivations. Bernanke, the theory goes, is neglecting opportunities to undermine President Obama's re-election chances.
Oddly enough, with widespread rumors about the Fed taking additional steps today, congressional Republicans suspect the opposite.
"It really is interesting that it is happening right now before an election," said Rep. Raul Labrador (R-Idaho). "It is going to sow some growth in the economy, and the Obama administration is going to claim credit." [...]While many Republicans have criticized the Fed on economic grounds, an announcement about new stimulus -- which could send financial markets soaring in the run-up to the election -- is likely to bring charges that the bank has partisan aims."They are the ones who always say they want to remain independent. So they should consider, just how independent are they when they come out, only 50 days before the election, with this?" said Rep. Scott Garrett (R-N.J.).
Ordinarily, elected officials at least try to maintain the pretense that their principal concern is with the public's welfare. Members of Congress are not, in theory, supposed to root against the economy for purely partisan reasons.
But with Bernanke considering additional steps, some of these Republican lawmakers aren't even bothering to keep up appearances. Labrador concedes he believes Fed action will "sow some growth in the economy," but he's upset anyway -- a better economy might reflect well on the president. Garrett is resorting to almost threatening the Fed -- it's some nice independence you have there, Mr. Bernanke; it'd be a shame if something happened to it.
What matters, in other words, is pre-election posturing, not whether Americans benefit or suffer. For decades, Republicans supported boosting the economy through monetary stimulus; Democrats preferred fiscal stimulus. In the Obama era, Republicans now oppose both, fearing the Obama administration might possibly "claim credit."
I'm not shocked by the cynicism, but it's unusual to see policymakers talk like this openly and on the record.