“Hating On Ben Bernanke”: Mitt Romney Takes Up Residence In The Right’s Intellectual Fever Swamps
Last week Ben Bernanke, the Federal Reserve chairman, announced a change in his institution’s recession-fighting strategies. In so doing he seemed to be responding to the arguments of critics who have said the Fed can and should be doing more. And Republicans went wild.
Now, many people on the right have long been obsessed with the notion that we’ll be facing runaway inflation any day now. The surprise was how readily Mitt Romney joined in the craziness.
So what did Mr. Bernanke announce, and why?
The Fed normally responds to a weak economy by buying short-term U.S. government debt from banks. This adds to bank reserves; the banks go out and lend more; and the economy perks up.
Unfortunately, the scale of the financial crisis, which left behind a huge overhang of consumer debt, depressed the economy so severely that the usual channels of monetary policy don’t work. The Fed can bulk up bank reserves, but the banks have little incentive to lend the money out, because short-term interest rates are near zero. So the reserves just sit there.
The Fed’s response to this problem has been “quantitative easing,” a confusing term for buying assets other than Treasury bills, such as long-term U.S. debt. The hope has been that such purchases will drive down the cost of borrowing, and boost the economy even though conventional monetary policy has reached its limit.
Sure enough, last week’s Fed announcement included another round of quantitative easing, this time involving mortgage-backed securities. The big news, however, was the Fed’s declaration that “a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens.” In plain English, the Fed is more or less promising that it won’t start raising interest rates as soon as the economy looks better, that it will hold off until the economy is actually booming and (perhaps) until inflation has gone significantly higher.
The idea here is that by indicating its willingness to let the economy rip for a while, the Fed can encourage more private-sector spending right away. Potential home buyers will be encouraged by the prospect of moderately higher inflation that will make their debt easier to repay; corporations will be encouraged by the prospect of higher future sales; stocks will rise, increasing wealth, and the dollar will fall, making U.S. exports more competitive.
This is very much the kind of action Fed critics have advocated — and that Mr. Bernanke himself used to advocate before he became Fed chairman. True, it’s a lot less explicit than the critics would have liked. But it’s still a welcome move, although far from being a panacea for the economy’s troubles (a point Mr. Bernanke himself emphasized).
And Republicans, as I said, have gone wild, with Mr. Romney joining in the craziness. His campaign issued a news release denouncing the Fed’s move as giving the economy an “artificial” boost — he later described it as a “sugar high” — and declaring that “we should be creating wealth, not printing dollars.”
Mr. Romney’s language echoed that of the “liquidationists” of the 1930s, who argued against doing anything to mitigate the Great Depression. Until recently, the verdict on liquidationism seemed clear: it has been rejected and ridiculed not just by liberals and Keynesians but by conservatives too, including none other than Milton Friedman. “Aggressive monetary policy can reduce the depth of a recession,” declared the George W. Bush administration in its 2004 Economic Report of the President. And the author of that report, Harvard’s N. Gregory Mankiw, has actually advocated a much more aggressive Fed policy than the one announced last week.
Now Mr. Mankiw is allegedly a Romney adviser — but the candidate’s position on economic policy is evidently being dictated by extremists who warn that any effort to fight this slump will turn us into Zimbabwe, Zimbabwe I tell you.
Oh, and what about Mr. Romney’s ideas for “creating wealth”? The Romney economic “plan” offers no specifics about what he would actually do. The thrust of it, however, is that what America needs is less environmental protection and lower taxes on the wealthy. Surprise!
Indeed, as Mike Konczal of the Roosevelt Institute points out, the Romney plan of 2012 is almost identical — and with the same turns of phrase — to John McCain’s plan in 2008, not to mention the plans laid out by George W. Bush in 2004 and 2006. The situation changes, but the song remains the same.
So last week we learned that Ben Bernanke is willing to listen to sensible critics and change course. But we also learned that on economic policy, as on foreign policy, Mitt Romney has abandoned any pose of moderation and taken up residence in the right’s intellectual fever swamps.
By: Paul Krugman, Op-Ed Contributor, The New York Times, September 16, 2012
The Candidates Weren’t The Only Ones On Display In Tampa
The point of presidential candidate debates is to offer the public a chance to scrutinize and evaluate those seeking national office. Occasionally, though, voters get the chance to scrutinize and evaluate those in the audience, which is nearly as interesting.
The candidates seeking the Republican presidential nomination are a pretty scary bunch — remember, one of them stands a reasonably good chance of becoming the leader of the free world in about 17 months — and the two-hour display on CNN last night was a depressing reminder of what’s become of the GOP in the 21st century. That said, maybe it’s just me, but I’m starting to find the audiences for these debates even more disconcerting.
Wolf Blitzer posed a hypothetical scenario to Ron Paul, asking about a young man who makes a good living, but decides to forgo health insurance. Then, tragedy strikes and he needs care. Paul stuck to the libertarian line. “But congressman,” the moderator said, “are you saying that society should just let him die?”
And at that point, some in the audience shouted, “Yeah,” and applauded.
Earlier in the debate, Blitzer asked Rick Perry about his attacks on Federal Reserve Chairman Ben Bernanke. “I said that, if you are allowing the Federal Reserve to be used for political purposes, that it would be almost treasonous,” Perry said. “I think that is a very clear statement of fact.”
The audience loved this, too.
What’s more, note that in last week’s debate, the mere observation that Perry has signed off on the executions of 234 people in Texas, more than any other governor in modern times, was enough to generate applause from a different GOP audience.
Taken together, over the last five days, we’ve learned that the way to impress Republican voters, at least the ones who show up for events like these, is to support letting the uninsured die, accusing the Fed of treason for trying to improve the economy, and executing lots of people.
There’s a deep strain of madness running through Republican politics in 2011, and it appears to be getting worse. Those wondering why the GOP presidential field appears weak, insipid, and shallow need look no further than the voters they choose to pander to.
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, September 13, 2011
“We The People” And America’s Future: Is Rick Perry As American As He Thinks He Is?
A few weeks ago, I wrote a piece asking whether Governor Rick Perry could call himself a Christian given his opposition to government actions to help the hungry, aged, and ill. Not surprisingly, many challenged my view of Christianity. In letter after letter they pointed out that Christ spoke to individuals, not government. My observation that He was speaking to a conquered people, not free individuals who could use their power to make a more just state, was not convincing. My reference to the prophets Micah, Amos, Jeremiah, and Isaiah, each of whom called on governmental leaders to help the poor, was dismissed as being from the “Old Testament.”
I will surely return to the issue of Christianity again, but I devote this piece to Rick Perry’s character and the character he would nurture in American citizens. Teddy Roosevelt said, “Character, in the long run, is the decisive factor in the life of an individual and of nations alike.” So what is the character that Perry embodies? What is his view of the American citizen and the citizen’s responsibility to our country and to one’s fellows?
First, Perry himself.
His persona evokes the rugged individualist. His warning to Ben Bernanke, chairman of the Federal Reserve, not to come to Texas so that he can avoid being subjected to “real ugly” frontier justice evidences a character antithetical to one of the crowning achievements of the United States — a nation under law, not men. In a phrase, he dismisses the Bill of Rights — due process, trial by jury, the right to confront one’s accuser.
The real question is not what character he would make of the United States but whether he believes in America at all. He has threatened to secede. Central to his campaign is his pledge to shrink the federal government — making it impossible for our noble nation to lead the world, to serve as the “city on the Hill.”
Perry may want to pretend that he is taking America back to a better past, but his actions are part of the movement away from nation-states, where countries are largely irrelevant. The notion that we are at the end of the need for nation-states is gaining more adherents globally. The fortunate few, commonly referred to as the Davos groupies, hang out with the other well off and well-heeled all over the world. Summering in Europe, wintering in Colorado, the global elite have more in common with and feel more loyal to their carefully connected crowd than with their fellow citizens. When one’s loyalty lies with one’s own class, where does that leave one’s country?
In declaring his wish to shrink the size of government, Perry believes that government should have as little role in people’s lives as possible. No investment in education, science research, building the railroads, highways, or sewage systems of the future. Why care about America’s future, why set inspirational goals that bring people together, if you don’t believe in “We the people”?
Nationalism, patriotism, commitment to one another are for Perry an anachronism, a thing of the past. He has not said that those with the greatest wealth, talent, and circumstances have any special responsibility to our country or their fellow citizens. He has not said we are all Americans together. Rather, he seems to be able to watch human suffering with equanimity — as though America should be a place of survival of the fittest. No Social Security, no Medicare, no unemployment insurance, no laws to protect clean air, clean water. When hurricanes, tornadoes, earthquakes, and flood destroy home and communities — no FEMA, no help. “We” are on our own.
In his book Fed Up!: Our Fight to Save America From Washington, Perry writes that the 16th Amendment, which gave birth to the federal income tax, was “the great milestone on the road to serfdom,” because it represented “the birth of wealth redistribution in the United States.”
Individualism, self-reliance, self-respect — these are great virtues, useful in many fields of endeavor. But they are not enough to sustain a nation. Virtues don’t spring into being in a moment. They need to be exercised and practiced. Nations at war need courage, quick thinking, and selflessness. Nations at peace require that sense of duty to others. No man goes into a burning building for mere money. Nor does a fierce individualism nurture the patience that a teacher requires, the love given by a hospice nurse caring for a dying man.
Citizens’ moral compasses do not stem only from their faith. Government also defines the moral standard of a nation. If we are told that blacks are worth but three-fifths of whites, many will see this as the acceptable treatment of their fellow man. Likewise, when the government declares it illegal to discriminate on the basis of race, we see that discrimination is also wrong.
When a candidate like Governor Perry boasts that he will shrink government by cutting those programs that grasp the nation’s imagination of what we can do together, he is saying that America does not need the one institution in which we make our most solemn decisions together. We need not nurture a nation of laws, nor educate the young, nor protect the elderly. Teddy Roosevelt took on the trusts, protected the environment, made America more just. The character of the nation improved with his leadership. Can it improve with Perry’s?
By: Kathleen Kennedy Townsend, The Atlantic, August 29, 2011
The GOP Is Fed Up With Its Choices
In theory, Democrats should be nervous about Texas Gov. Rick Perry’s decision to enter the presidential race. In practice, though, it’s Republicans who have zoomed up the anxiety ladder into freak-out mode.
To clarify, not all Republicans are reaching for the Xanax, just those who believe the party has to appeal to centrist independents if it hopes to defeat President Obama next year. Also, those who believe that calling Social Security “an illegal Ponzi scheme” and suggesting that Medicare is unconstitutional might not be the best way to win the votes of senior citizens.
These and other wild-eyed views are set out in Perry’s book “Fed Up!” His campaign has already begun trying to distance the governor from his words, with communications director Ray Sullivan saying last week that the book “is a look back, not a path forward” — that “Fed Up!” was intended “as a review and critique of 50 years of federal excesses, not in any way as a 2012 campaign blueprint or manifesto.”
One problem with this attempted explanation is that the book was published way back in . . . the fall of 2010. It’s reasonable to assume that if Perry held a bunch of radical, loony views less than a year ago, he holds them today.
Another problem is that as recently as Aug. 14, according to the Wall Street Journal, Perry responded to an Iowa voter who asked how he would fix entitlement programs by saying, “Have you read my book, ‘Fed Up!’? Get a copy and read it.”
But Perry doesn’t give us time to plow through his tome, what with his frequent newsmaking forays onto the rhetorical fringe. He had barely been in the race for 48 hours when he announced it would be “treasonous” for Federal Reserve Chairman Ben Bernanke to increase the money supply before the 2012 election. If Bernanke did so, Perry said, “we would treat him pretty ugly down in Texas.”
The outburst allowed Ron Paul, who has spent years calling for the Fed to be abolished, to say of Perry: “He makes me look like a moderate.”
Perry made no attempt to disavow his remarks about Bernanke. Whatever his campaign staff might wish, the candidate apparently does not warm to the task of disavowal.
Soon Perry moved on to the science of climate change, which “Fed Up!” dismisses as a “contrived phony mess.” Perry told an audience in New Hampshire that “a substantial number of scientists” have acted in bad faith, manipulating data “so that they will have dollars rolling in to their projects.” Perry added that “we’re seeing almost weekly, or even daily, scientists who are coming forward and questioning the original idea that man-made global warming is what is causing the climate to change.”
None of that is true. There is overwhelming consensus among climate scientists that human activity — especially the burning of fossil fuels — is contributing to climate change. Multiple investigations have found no evidence of fraud or manipulation of data. Unless Perry is ready to publish fundamental new insights into physical and chemical processes at the molecular level, his swaggering stance against climate science is all hat and no cattle.
“The minute that the Republican Party becomes the anti-science party, we have a huge problem,” candidate Jon Huntsman said Sunday on ABC’s “This Week” — a declaration that makes me wonder how familiar Huntsman is with the political organization he seeks to lead.
Also in his first week of campaigning, Perry suggested that the military doesn’t respect Obama as commander in chief — and, when asked whether he believes Obama loves America, told a reporter that “you need to ask him.” This is music to the ears of the hate-Obama crowd on the far right. But mainstream voters, whether or not they support Obama’s policies, generally like the president, do not question his patriotism and want him to succeed.
“I think when you find yourself at an extreme end of the Republican Party,” Huntsman said of Perry, “you make yourself unelectable.”
He’s correct. But maybe we shouldn’t take his word for it, or Ron Paul’s word — after all, they’re Perry’s opponents. Maybe we also shouldn’t take the word of Karl Rove, who called Perry’s remarks “unpresidential,” since Texas apparently isn’t big enough for the George W. Bush camp and the Rick Perry camp to coexist without feuding.
Suffice it to note that two weeks ago, GOP luminaries were scrambling to find new candidates. And now, after Perry’s debut? Still scrambling, I’m afraid.
By: Eugene Robinson, Opinion Writer, The Washington Post, August 22, 2011
First Secession, Now Contempt: An Ugly Start To Rick Perry’s Campaign
“If This guy prints more money between now and the election, I dunno what y’all would do to him in Iowa, but we would treat him pretty ugly down in Texas.”
Thus spoke Republican Gov. Rick Perry on Monday, referring to Ben Bernanke, chairman of the Federal Reserve Board. You might chalk the remark up to a weak attempt at humor —if you watch the video, you’ll hear a few nervous laughs from the small crowd — but then Mr. Perry went on in an even less appropriate vein.
“Printing more money to play politics at this particular time in American history is almost treacherous, or treasonous, in my opinion,” Mr. Perry said.
“To play politics”? Mr. Bernanke was appointed chairman of the Fed by a Republican president, George W. Bush. He was reappointed by a Democratic president, Barack Obama, in an acknowledgment of how indispensable he had become in a time of crisis. In fall 2008, when global finances threatened to spin out of control, Mr. Bernanke responded with a steeliness that may have saved the country from disaster far worse than the severe downturn it has experienced.
That’s our view; it’s the view, we’d wager, of most economists. Mr. Bernanke’s actions had the support of both Mr. Bush and then-candidate Obama, of Republican Treasury Secretary Henry Paulson and future Democratic Treasury Secretary Timothy F. Geithner. And in the years since, Mr. Bernanke and his team have done as much as the Fed should do to get the economy moving again.
Now, if Mr. Perry disagrees, that’s fine. The actions of the Fed leading up to, during and after the crisis will be studied and critiqued for decades. Maybe Mr. Perry could have done better; we’ll be interested to hear about his economic program in the days to come.
But there has never been a whisper, let alone any evidence, that Mr. Bernanke’s actions have been motivated by anything but patriotism and determination to see the U.S. economy regain its footing. There was never a whisper, let alone any evidence, that the Republican-appointed Fed chairman sought to help Republican candidate John McCain in 2008, and there is no reason to believe he is playing politics now.
If Mr. Perry has evidence to the contrary, he should present it. If not, he should apologize.
But questioning his opponents’ good faith seems to be part of Mr. Perry’s early playbook. He already has disparaged Mr. Obama for not serving in the military, something that Mr. McCain — with far greater claim on the nation’s gratitude for his military service than Mr. Perry has — never stooped to. And when asked whether Mr. Obama loves his country, Mr. Perry responded, “I dunno, you need to ask him. . . . You’re a good reporter, go ask him.”
When we asked the campaign about these remarks, a spokesman e-mailed, “The Governor never said the President does not love his country.” As to his remarks concerning Mr. Bernanke, “The Governor was expressing his frustration with the current economic situation and the out of control spending that persists in Washington.” But frustration does not excuse accusing people of treason if you don’t like their policies.
In the days after the Jan. 8 shooting of Rep. Gabrielle Giffords (D-Ariz.) and 18 others just outside Tucson, there was widespread revulsion at the nastiness of much political rhetoric and widespread commitment to argue about issues without questioning opponents’ motivations or character. Mr. Perry’s presidential campaign, not yet a week old, suggests he didn’t get the message. We hope he begins to make his case in a way that will reflect better on his own character.
By: Editorial Board Opinion, The Washington Post, August 16, 2011
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