As he moves closer to a national campaign, Sen. Rand Paul (R-Ky.) talks quite a bit about the Federal Reserve and monetary policy. That wouldn't be especially noteworthy, were it not for the fact that Rand Paul
doesn't seem to have any idea what he's talking about when it comes to the Federal Reserve and monetary policy.
...Paul could face a significant challenge if he emerges from Iowa with a legitimate shot at the Republican nomination. Because experts say he gets many of his arguments about the Fed flat wrong. And the establishment wing of the GOP -- backed by piles of Wall Street money -- views Paul's approach to the Fed as dangerous and irresponsible. "He seems to have a poor understanding of what's actually on the Fed balance sheet and how the bank operates," said James Pethokoukis, a scholar at the conservative American Enterprise Institute. "And if you don't have a firm grip on one of your signature issues, people eventually are going to doubt other things you have to say."
I knew that if I waited long enough, I'd eventually agree with something Pethokoukis had to say.
The irony is, Rand Paul and many of his backers probably wear this anxiety as a badge of honor. Wall Street's affection for Republicans is well established and goes back generations, but Paul and his supporters come from a very different wing of the GOP -- one that assumes they're doing something right if they're making the financial industry nervous.
And while I can appreciate where that sentiment comes from, this isn't a situation in which Wall Street is upset by the prospect of overnight and consumer safeguards. Rather, this is Wall Street feeling nervous because Rand Paul's entire understanding of monetary policy is bonkers.
What's more, let's not forget that the junior senator from Kentucky isn't the only one. House Ways & Means Committee Chairman Paul Ryan's (R-Wis.) views on monetary policy are
genuinely bizarre, and as Danny Vinik
explained overnight, several presidential candidates' views this cycle are every bit as problematic.
While the Kentucky senator has the most dangerous economic views of any 2016 candidate, thanks to his rabid disdain for the Fed, his views aren't that different from the GOP establishment or the rest of the primary field. [...] Wall Street, Big Business and even conservative economists might worry about the regulatory agenda or tax-and-spend policies of a President Clinton. But they should be downright scared of a President Walker or President Cruz, whose nomination of some hard money crank for Fed chair and Fed Board positions could upend the U.S. economy -- at the very moment when it's finally regaining its balance.
Watch this space.
